Congress must pass new stimulus now to fend off another virus-driven economic slowdown, says one Fed president
- Monetary policy is where it needs to be, and Congress needs to act quickly on new stimulus if it aims to avoid another economic slump,
Federal Reserve Bank of ClevelandPresident Loretta Mestersaid Thursday.
- The lack of new fiscal aid after months of negotiations "is concerning," she added in an interview on Bloomberg TV.
- The legislative stalemate comes as economic indicators point to a weakening recovery and COVID-19 case counts repeatedly hit fresh records.
- Monetary policy, on the other hand, "is doing the right thing in keeping things very accommodative," Mester said, adding that further easing can't make up for the absence of fiscal support.
Congress needs to act soon if it aims to avoid another bout of economic turmoil,
Fears of a double-dip recession are escalating as the US contends with its worst wave yet of COVID-19 infections. Daily case counts continue to hit new records, and several economic indicators point to a weakening pace of recovery.While the start of the coronavirus recession was met with a historic monetary and fiscal response, the absence of new stimulus is "very concerning," Mester said in an interview on Bloomberg TV.
Read more: 'I still think there's a long way to go': A crypto CEO breaks down why he's bullish on Bitcoin even after its surge back to $18,000 — and shares the other cryptocurrency he thinks is here to stayPresident-elect Joe Biden's victory and the likelihood of a Republican-controlled Senate cut into optimism for a front-loaded fiscal relief measure in 2021. Democrats and Republicans remain worlds apart in deciding how much money to spend on new aid, as well as what to spend it on.
Dashed hopes for a near-term bill led Wall Street to look back at the
Some areas of the economy, namely the automotive and housing
Mester serves as a voting member of the Federal Open Market Committee. The group of Fed policymakers is set to meet on December 15 and 16, where it will all but certainly elect to keep interest rates at record lows.Read more: Buy these 15 cheap, unheralded stocks that will take off in 2021 thanks to their accelerating sales growth, Jefferies says
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