The long discussions between the Republicans and Democrats on the next round of economic stimulus for the US ended abruptly, without hopes for additional aid for businesses and households.
Claudia Sahm, a policy analyst, shared an article on the comments made by Federal Reserve chair, Jerome H. Powell, after US President Donald Trump abruptly called off stimulus talks ending hopes for providing additional aid for people affected by the pandemic.
Powell noted that lack of support could lead to a weak recovery and cause hardship for both households and businesses.
He noted that the risks of overdoing stimulus are smaller in comparison to the damage that lack of support will cause including household insolvencies and business bankruptcies.
Powell also noted that prolonged recovery will lead to increased job losses and economic disparity as low income groups, people of colour and women were most likely to be affected.
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He opined that recovery will be stronger if monetary policy and fiscal policy work together.