Fed policymakers call for fiscal support to save U.S. economy
04/08/2020 09:43, Washington /United States

(TAP) - The U.S. economy, battered by a resurgence in the spread of COVID-19, needs increased government spending to tide over households and businesses and broader use of masks to better control the virus, U.S. central bankers said on Monday.

The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.

«The ball is in Congress' court,» Chicago Fed President Charles Evans told reporters on a call. «Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely.»

Without more government aid, Evans said, «aggregate demand trouble is brewing.» Translated for non-economists: people could stop spending and the bottom could really fall out of the economy.

Or, as Richmond Fed President Thomas Barkin put it, «quickly pulling away the support that consumers and businesses are receiving would be a pretty traumatic move for what's happening in the economy.»

The full court Fed press for more government spending came as Republicans appeared reluctant to spend much more than the $3 trillion Congress had already committed to bolstering the economy in the face of the virus. But things have gotten worse since then, Barkin said.

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