Federal Reserve Chairman Jerome Powell urged House Speaker Nancy Pelosi (D-Calif.) to “think big fiscally” as Congress rushes to craft and pass a massive economic rescue plan, according to a senior Democratic aide.
Powell and Pelosi spoke at 2 p.m. Tuesday to discuss the Fed’s emergency actions to shield the economy and stabilize financial markets as the coronavirus pandemic forces entire industries to shutter or limit their activity.
The call between the world’s most powerful central banker and the top U.S. legislative official comes as Powell tacitly urged Congress to take swift and powerful action to bolster the U.S. economy.
The Fed this week slashed its baseline interest rate range to 0 to 0.25 percent, announced it would purchase $700 billion in bonds and ramped up offerings of short-term loans to banks and companies to keep credit flowing. The crisis-level intervention used almost all of the Fed’s ammunition to fight a recession, prompting Powell to call Sunday for an ambitious fiscal stimulus plan.
The Fed declined to comment Tuesday on Powell’s call with Pelosi, referring to the chairman’s Sunday press call with reporters, during which he called fiscal support “critical” to protect the economy.
“We have the tools that we have,” Powell said Sunday. “I think we use them quite aggressively for the benefit of the public.”
“But this is a multifaceted problem, and it requires answers from different parts of the government,” Powell continued.
While Pelosi encouraged Powell “explore ways to use the Fed’s authority to assist the most affected state and local governments,” per the senior aide, she was “was encouraged by the Chairman’s perspective that with interest rates at nearly zero Congress is enabled to fiscally think big as we craft a robust response.”