As previewed earlier, there were no notable surprises in his prepared remarks in which he emphasizes that the outlook remains highly uncertain, the expansion is far from complete, and in keeping with the Fed's recent appeals to Congress, Powell asks Congress to quickly vote through more fiscal stimulus, assuring lawmakers that providing too much stimulus wouldn't be a problem.
Powell's remarks come amid continued gridlock in Congress and Republican opposition to a larger relief package that's kept talks with Democrats at a stalemate in Congress since aid to jobless Americans and small businesses expired in July and August.
"Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses," Powell said in the text of a speech for a virtual conference hosted by the National Association for Business Economics. "By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste."
While Powell didn't explicitly reference either party's position in his prepared remarks, he said that the "recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."
Meanwhile, the Fed chair confirmed what we said last week, namely that US consumer are rapidly burning through their savings, something which has so far allowed US consumption to remain stable, however at the current rate of spending, savings would will likely return to pre-covid levels in 2-3 months:
"Consumption held up well through August after the expiration of expanded unemployment insurance benefits, indicating that savings from transfer payments continue to support economic activity," Powell said. "Still, since it appears that many will undergo extended periods of unemployment, there is likely to be a need for further support."
Watch him live ...