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Powell (Fed): "It Would Be Concerning That Congress Withdrew Fiscal Support Very Quickly"


Jerome Powell It is news again. The president of the Federal Reserve (Fed) He has appeared again in Congress, this time before the Financial Services Committee of the House of Representatives.

The central banker has recommended not withdrawing tax incentives too soon approved against the coronavirus until there is more clarity on the evolution of the pandemic.

"It would be troubling if Congress withdraws the support it is providing too quickly," he has told political leaders. "I think it would be appropriate think of continuous support for people who are out of work and for smaller companies. The economy has started to recover, but it is in a critical phase and I think the support is appropriate at the moment, "he added.

Powell believes that the monetary measures applied by the Fed should be reinforced by Congress at the fiscal level, since the US faces worst recession since World War II. This Tuesday, in his speech before the Senate Banking Committee, he stated that "a full recovery before the coronavirus is fully contained is unlikely"

Powell's words come after the Fed announced Monday that will directly buy corporate bonds to support market liquidity and the availability of credit for large companies.

Until now, the agency had announced that would buy corporate debt through listed funds and its shift in focus pleased the markets.

The central bank promised last week unlimited purchases of assets and 0% rates for several years, at least until the end of 2022. Powell defended the unlimited stimuli of the central bank by the unprecedented uncertainty caused by the coronavirus, against those who criticize that the Fed is causing a bubble on Wall Street with its unlimited stimuli.

"We want markets to work; we are not looking for a particular level. If we had to stop because we think asset prices are too high,what would happen to those people that we're supposed to be serving? "he asked at a press conference.

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