New York —
Powell’s remarks echo the urgency voiced by President Joe Biden for his $1.9-trillion in additional pandemic aid, a package that is moving ahead in Congress despite Republican opposition. In doing so, he also delivered a nuanced rebuttal to the minority of Democrats, as exemplified by former Treasury secretary Lawrence Summers, who view that relief proposal as too large.
His remarks were swiftly seized by Democrats as validating their push to go big with the next round of fiscal aid. As the risk of the year-long pandemic recedes with vaccinations rolling out, it’s unclear if employers will make do with smaller workforces, or if job growth will pick up. He also leant against the idea that the economy might overheat with additional stimulus. He said it could take “many years” to overcome scars from long-term unemployment, and even with the jobless rate at 3.5% in February, signs of inflation were scarce.“There was every reason to expect that the labour market could have strengthened even further without causing a worrisome increase in inflation were it not for the onset of the pandemic,” he said.