Federal Reserve Chairman Jerome Powell said the U.S. economy is improving but has a long way to go before a full recovery from the global pandemic.
In prepared text of testimony that Powell is scheduled to deliver before the House Financial Services Committee on Tuesday, he says that "Many economic indicators show marked improvement… Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain."
Powell will appear alongside Treasury Secretary Steven Mnuchin, a quarterly exercise mandated by the Cares Act passed by Congress in March and which appropriated $2 trillion to help speed the U.S. economic recovery. The pair are likely to face questions about their use of Cares Act funds and about what else should still be done.
In his testimony, Powell repeated earlier remarks that more is required from both fiscal and monetary policy to prevent the pandemic from causing long-term damage to the economy.
"The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government," he said.
Powell appeared to anticipate questions about the Fed’s troubled Main Street Lending Program, a $600-billion facility aimed at providing credit to small- and mid-sized companies. He said Fed officials had responded to feedback by making adjustments to the program.
Still, he added that "Main Street loans may not be the right solution for some businesses, in part because the Cares Act states clearly that these loans cannot be forgiven."
