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Illustration: Eniola Odetunde/Axios

After the House of Representatives released a proposed $3 trillion relief bill on Tuesday, Fed chair Jerome Powell weighed in, backing calls for Congress to do more to battle the economic impact of the coronavirus pandemic.

Why it matters: Expectations for the pandemic-fueled recession are morphing from a short-term downturn to a potentially yearslong slog and economists are urging policymakers to adjust government spending accordingly.

  • Powell's comments Wednesday made him the latest and perhaps most influential voice in a chorus advocating more fiscal spending.

Driving the news: In pre-written remarks, Powell detailed the harms of "deeper and longer" recessions, warning that "the recovery may take some time to gather momentum and time can turn liquidity problems into solvency problems."

  • "Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery," Powell said during a webcast with the Peterson Institute for International Economics.

Between the lines: "Fed officials are unanimous on this — they are all in on, 'Congress has to do more,'" Claudia Sahm, a former top Fed economist and now director of macroeconomic policy at the Washington Center for Equitable Growth, said during a separate online event.

What's happening: Recent economic studies and business developments are starting to back Powell's worries that the Fed and Congress will need to provide assistance to the U.S. economy for some time.

  • In addition to the record high unemployment rate, thousands of business closures and wave of bankruptcies, new academic research estimates that 42% of recent layoffs will result in permanent job loss.

Yes, but: "Right now in the White House, we’re in wait-and-see mode," White House economic adviser Kevin Hassett said during a briefing with the Brookings Institution Tuesday.

  • Hassett argued that some of the big-ticket items in the House's so-called Heroes Act — which includes nearly $1 trillion for states and municipal governments, a second round of $1,200 direct payments for individuals, a $175 billion housing assistance fund, a 15% increase in food stamps and more — could be "putting the cart before the horse."
  • Republican senators also point to the annual U.S. budget deficit that has already topped $4 trillion as a reason for patience.

Yes, but, but: "We are in an election year and have had bipartisan support for lots of spending already," Kevin Barry, CIO of investment adviser CAPTRUST, tells Axios.

  • "Do I think there will be significant political interest in additional support? The answer is yes."

Go deeper:

Go deeper

Dion Rabouin, author of Markets
Aug 20, 2020 - Economy & Business

Investors are looking for more action from the Fed in the coming months

Expand chart
Data: Federal Reserve; Chart: Axios Visuals

Minutes from the Fed's July policy meeting were released Wednesday and policymakers' dour outlook suggests that more easing and stimulus could be on the way, strategists who closely watch the central bank say.

Why it matters: More liquidity from the Fed could mean more gains for stock and bond prices and further erosion of the dollar.

G20 coal impasse previews fraught UN climate summit

A man tends to vegetables in a field as emissions rise from nearby cooling towers of a coal-fired power station in Tongling, Anhui province, China, Jan. 16, 2019. (Qilai Shen/Bloomberg via Getty Images)

G20 environment ministers ended talks without agreeing to phase out domestic coal-fired power generation and funding for such plants abroad, a deadlock that foreshadows difficult negotiations looming for this fall's critical climate summit.

Driving the news: Officials who met in Naples, Italy, on Thursday and Friday could not find consensus language on the use and financing of the most carbon-emitting fuel.

Updated 2 hours ago - World

At least 125 dead in western India after landslides, monsoon flooding

Vehicles driving through a flooded street in Mumbai on July 19. Photo: Pratik Chorge/Hindustan Times via Getty Images

At least 125 people are dead after monsoon rains triggered landslides in the western Indian state of Maharashtra, authorities said on Saturday, according to Reuters.

State of play: Downpours lasting several days have impacted hundreds of thousands of people, as major rivers are in danger of breaking through their banks.