Federal Reserve Chair Jerome Powell was on Capitol Hill again this week to discuss the economic fallout from the COVID-19 pandemic and how recovery could be slowed if sufficient measures are not taken soon to buoy the economy.
Commenting on previous stimulus packages, Chair Powell said:
“The shock that we received — the economy received — was the largest in living memory. The question we will all have to answer over time is: Is it enough? I would say there’s a reasonable probability that more will be needed, both from you and from the Fed.”
Importantly, Chair Powell noted how the economic turmoil has a disproportionate effect on lower-income and minority communities.
“Low-income households have experienced, by far, the sharpest drop in employment, while job losses of African-Americans, Hispanics and women have been greater than that of other groups. If not contained and reversed, the downturn could further widen gaps in economic well-being that the long expansion had made some progress in closing.”
To stem the risks of further, long-lasting harm to the economy, Powell urged members of Congress to provide swift and comprehensive relief.
“[Legislation] can provide direct help to people, businesses and communities. This direct support can make a critical difference not just in helping families and businesses in a time of need, but also in limiting long-lasting damage to our economy.”
“It would be wise to look at ways to continue to support people who are out of work and also smaller businesses that may not have vast resources for a period of time…so that we can get through this critical phase. That support would be well placed at this time.”
Chair Powell’s recommendation for aggressive action by the federal government to save businesses – and the jobs and communities that depend on them – echo those of America’s Recovery Fund Coalition (ARFC). Just last week, ARFC released a survey showing 85 percent of small businesses are suffering moderate to severe reductions in revenue, with as many as 1.2 million small businesses at risk of closing by September 2020 without additional federal support.
To learn more about America’s Recovery Fund Coalition, and why Congress needs to act before it’s too late, please reach out to [email protected]