May 18, 2020 - Economy & Business

Fed chair: "There's no limit" to coronavirus stimulus response

Dion Rabouin, author of Markets

Photo: Mark Makela/Getty Images

Ahead of his testimony before the Senate Banking Committee on Tuesday, Fed Chair Jerome Powell previewed what Americans can expect in the coming months from policymakers: a whole lot more.

What it means: Powell has been adamant that the Fed has not run out of ammunition, even after adding more than $2.5 trillion to the central bank's balance sheet — more than half its pre-2020 total — in just the past two months.

What he said: "There's really no limit to what we can do with these lending programs that we have."

  • "So there's a lot more we can do to support the economy, and we're committed to doing everything we can as long as we need to."
  • Powell also called on Congress to do more, asserting again that it was necessary for fiscal spending to increase after a similarly straightforward call during an interview with the Peterson Institute for International Economics last week.

The state of play: Powell, a Republican who has spoken out about the unsustainable nature of the U.S. national debt, also took aim at deficit hawks who have balked at the cost of more spending.

  • "The U.S. has been spending more than it's been taking in for some time. And that's something we're going to have to deal with. The time to deal with that ... is when the economy is strong."
  • "When unemployment is low, when economic activity is high, that's when you deal with that problem. This is not the time to prioritize that concern."

Why it matters: Powell's comments are the latest evidence that he expects the coronavirus pandemic to cause serious and potentially long-term damage to the U.S. economy and expects much more than $2.5 trillion from the Fed will be needed to hold up financial markets.

  • The audiences for his recent overtures — the politically well-connected PIIE and now the active voters who watch "60 Minutes" — suggest he is working to create a similar sentiment among policymakers in Washington.

Go deeper: Fed chair warns U.S. economy may not "fully recover" until there's a vaccine

Go deeper

The long journey to herd immunity

Illustration: Sarah Grillo/Axios

The sought-after state of herd immunity — in which widespread outbreaks are prevented because enough people in a community are immune to a disease — is complicated by open questions about the effectiveness of a future vaccine and how COVID-19 spreads.

Why it matters: Unless a sufficient level of immunity is achieved in the population, the coronavirus could circulate indefinitely and potentially flare up as future outbreaks.

Updated 3 hours ago - Health

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

The Department of Health and Human Services moved on Thursday to require that an individual's race, ethnicity, age and sex be submitted to the agency with novel coronavirus test results.

Why it matters: Some cities and states have reported the virus is killing black people at disproportionately high rates. There are gaps in the national picture of how many people of color are affected, since the data has not been a requirement for states to collect or disclose.

Protests for George Floyd continue for 10th day

Thousands of protesters march over the Brooklyn Bridge on June 4 in New York City. Photo: Angela Weiss/AFP via Getty Images

All four former Minneapolis police officers have been charged for George Floyd’s death and are in custody, including Thomas Lane, J. Alexander Kueng and Tou Thao, who were charged with aiding and abetting second-degree murder and aiding and abetting second-degree manslaughter.

The latest: A man in Buffalo, New York bled out of one ear and lay motionless on the ground after police pushed him backward at a protest. He was later taken to the hospital and appeared to be alert, per a local reporter on the scene. Officers arrested five people during the protests in Niagara Square, a Buffalo Police Department statement noted.