Fed chief Powell slated for first of week's three
congressional appearances
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[September 22, 2020] By
Dan Burns and Ann Saphir
(Reuters) - U.S. Federal Reserve Chair
Jerome Powell on Tuesday makes the first of three appearances on Capitol
Hill this week to address lawmakers' questions and concerns about the
raft of emergency measures the central bank has taken to blunt the hit
to the economy delivered by the coronavirus pandemic.
Powell - who will be joined by Treasury Secretary Steven Mnuchin on
Tuesday and again Thursday - is likely to get an earful from lawmakers
concerned that there has been limited uptake so far on some of the
programs designed to help small businesses and that other Fed actions
have ignited a stock market rally that has exacerbated economic
inequality.
Tuesday's hearing - six weeks before a presidential election for which
the pandemic and the government's response to it is a central issue - is
before the House Financial Services Committee chaired by Democrat Maxine
Waters of California.
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"We remain committed to using our tools to do what we can, for as long
as it takes, to ensure that the recovery will be as strong as possible,
and to limit lasting damage to the economy," Powell will tell the panel,
according to the text of his remarks released on Monday.
The pandemic dealt a death blow to the longest-ever U.S. economic
expansion in the first quarter when widespread business shutdowns and
stay-at-home orders triggered the largest drop in activity since at
least World War Two. The Fed responded by cutting interest rates to near
zero, ramping up bond purchases and launched nearly a dozen emergency
credit facilities, several with backing from the U.S. Treasury.
The economy has made "marked improvement" since the depths of the
crisis, Powell said in his prepared remarks.
"Both employment and overall economic activity, however, remain well
below their pre-pandemic levels, and the path ahead continues to be
highly uncertain," Powell said in the prepared remarks. "The path
forward will depend on keeping the virus under control, and on policy
actions taken at all levels of government."
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![](../images/092220pics/busine27.jpg)
Federal Reserve Board
Chairman Jerome Powell leaves after a Senate Banking Committee
hearing on The Semiannual Monetary Policy Report to the Congress on
Capitol Hill in Washington, U.S., February 12, 2020. REUTERS/Yuri
Gripas
![](http://archives.lincolndailynews.com/2020/Sep/22/images/ads/current/peasleymemorials_lda100213.png)
In all, Powell said, the Fed has "helped unlock" $1 trillion of funding to keep
businesses from shutting so that they can more easily rehire workers when the
economy picks up. But less than that has actually made it out the door.
The Fed's $600 billion Main Street Lending program has so far lent or is in the
process of lending $2 billion to businesses that cannot otherwise obtain credit.
Critics say the Fed and Treasury should loosen terms so more borrowers can tap
in to the funds.
Nearly 30 million people across the country continue to draw weekly state
unemployment benefits. Congress is at an impasse on negotiations over additional
support for out-of-work Americans after a $600-a-week federal supplement to
jobless aid expired over the summer.
Powell has said that additional federal stimulus is likely to be needed, though
White House economic adviser Larry Kudlow says the recovery is "self-sustaining"
without it.
The Fed recently changed its operating framework and last week pledged not to
raise rates until it judges the economy has attained full employment and its
preferred measure of inflation has hit its target of a 2% annual rate and is on
track to exceed that modestly for some time.
Powell on Wednesday faces the House Select Subcommittee on the Coronavirus
Crisis chaired by Democrat Jim Clyburn of South Carolina, and finally the Senate
Banking Committee chaired by Republican Mike Crapo of Idaho on Thursday, when he
will be joined again by Mnuchin.
(Reporting by Dan Burns in Connecticut, Ann Saphir in Berkeley, Calif., and
Andrea Shalal and Howard Schneider in Washington; Editing by Matthew Lewis)
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