WASHINGTON (Pakistan Point News / Sputnik - 08th October, 2020) Most Federal Reserve bankers at their September meeting backed US Congress in issuing a new coronavirus stimulus relief, saying without it economic recovery from the pandemic would likely drag further, minutes of the meeting released Wednesday showed.
"The staff's forecast assumed the enactment of some additional fiscal policy support this year; without that additional policy action, the pace of the economic recovery would likely be slower," the minutes said. "In addition, the staff projection assumed that monetary policy would be even more accommodative than in the previous forecast in order to more fully reflect the revised consensus statement."
The US economy shrank at its fastest pace in history in the second quarter of 2020, contracting by 31.4 percent amid widespread lockdowns triggered by the pandemic. While economic data has been encouraging in recent months, recovery from the pandemic itself has remained spotty.
On the labor front, more than 21 million jobs were lost for all of March and April, at the height of lockdowns forced by the COVID-19. The labor market posted a strong rebound of 2.5 million jobs in May and 4.8 million in June, before the recovery began slowing.
The Fed said although real gross domestic product growth was projected to exceed potential output growth, the unemployment rate was expected to decline considerably further, and inflation was forecast to pick back up in 2021 through 2023.
"In addition, the staff projection assumed that monetary policy would be even more accommodative than in the previous forecast in order to more fully reflect the revised consensus statement," the release said.
Congress passed four packages of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the second quarter of this year, dispensing roughly $3 trillion to disburse as loans and grants to businesses, paycheck protection for workers and personal aid to qualifying US citizens and residents.
The White House and its Democrat rivals in Congress have been locked in a stalemate since on a successive package to the CARES, arguing over the size of the next relief, as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid.
President Donald Trump, who stands for reelection in November, has accused US House Speaker and Democrat leader Pelosi of playing football over the issue. Pelosi says any stimulus deal should be to the advantage of Americans, not for Trump's political expediency.
