Powell: Jobs recovery faces ‘long tail’ of a couple of years

(Reuters) – Despite “a lot of strength in the economy,” millions of U.S. workers displaced from restaurant, travel, and similar jobs will struggle to find new employment and need steady support from the government, Federal Reserve Chair Jerome Powell said on Thursday, warning a full jobs recovery could take years.

“There is a particular part of the economy which involves getting people together and feeding them, flying them around the country, having them sleep in hotels, entertaining them,” Powell said in online remarks to the Fed’s annual economic symposium. “That part of the economy will find it very difficult to recover…That is millions of people who are going to struggle to find work. We need to stay with those people….We are looking at long tail of probably a couple of years at least.”

(Reporting by Howard Schneider; Editing by Chizu Nomiyama)

McConnell says U.S. needs ‘another boost’ as coronavirus relief talks continue

By Patricia Zengerle

WASHINGTON (Reuters) – Senate Majority Leader Mitch McConnell on Thursday said the U.S. economy needs an “additional boost” to cope with the fallout of the coronavirus pandemic, as his Democratic counterparts and White House officials try to hash out a next wave of relief.

As talks neared the end of their second week, the four principal negotiators – a group that does not include McConnell – appeared to be near agreement on some topics, but still trillions of dollars apart on major issues including the size of a federal benefit for tens of millions of unemployed workers.

McConnell said he agreed with Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin that agreement is needed on another aid package, even though some of his fellow Republicans in the Senate do not think so.

“I think we need an additional agreement,” the Republican Senate leader told CNBC, adding “the economy does need an additional boost.” Nonpartisan analysts say McConnell’s Republicans face a risk of losing their Senate majority in November’s elections.

McConnell continued to insist that unemployment benefits in any deal should be adjusted downward and that the agreement should include liability protections against lawsuits for reopening businesses during the pandemic.

Mnuchin was due to join fellow Republican Mark Meadows, the White House chief of staff, and the two top congressional Democrats, House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer, for talks on Capitol Hill at 5 p.m. EDT (2100 GMT).

Others not in the negotiation room considered their own actions, as Republican senators said they had been told that no deal by Friday would mean no deal at all.

Republican President Donald Trump stood ready to use executive orders to address issues such as unemployment benefits and protections against evictions if talks failed, according to Meadows.

Republican Senator Marco Rubio told reporters that the Senate on Thursday could also take up a new version of the Payroll Protection Program that provides financial assistance to small businesses in the form of forgivable loans.

Congress passed more than $3 trillion in relief legislation early in the pandemic. But lawmakers missed a deadline last week to extend the $600 per week in enhanced unemployment payments that played a key role in propping up the economy.

Pelosi and Schumer have pushed for a comprehensive package of assistance for the unemployed, the poor, hospitals, schools and state and local governments.

“The leader and I are determined that we will come to agreement. But it has to meet the needs of the American people,” Pelosi said.

Mnuchin has warned that the Trump administration would not accept “anything close” to the $3.4 trillion in new aid sought by Democrats. Senate Republicans have proposed a $1 trillion package that many of their own members have rejected.

Trump, Powell met Monday at White House to discuss economy

By Howard Schneider

WASHINGTON (Reuters) – U.S. President Donald Trump and Federal Reserve Chair Jerome Powell met at the White House on Monday morning, their second meeting since Powell started the job in February 2017 and soon after became the target of frequent criticism from the president who had appointed him.

The Fed announced the meeting in a morning press release, noting they met “to discuss the economy, growth, employment and inflation.”

“Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.,” Trump tweeted soon after, calling the session “good & cordial.”

The Fed’s wording closely followed its description of Powell’s first meeting with Trump, this past February, over a dinner that also included Vice Chair Richard Clarida.

Trump’s tweet marked a change in tone. The president in recent months derided Powell and colleagues as “pathetic” and “boneheads” for not cutting interest rates, and in August labeled Powell personally as an enemy of the United States on a par with China leader Xi Jinping.

The Fed in its statement was careful to note what wasn’t discussed: Powell’s expectations for future monetary policy. Trump has for more than a year charged the Fed with undermining his economic policies by, in his view, keeping interest rates too high, and depriving the United States of what Trump feels are the benefits of the negative rates of interest set by the European and Japanese central banks.

The U.S. central bank has cut rates three times this year – in part to offset what it views as damage done by the Trump administration’s trade war with China. But after their last meeting, in October, policymakers signaled they would lower rates no further unless the economy takes a serious turn for the worse.

Less than 24 hours after that decision, Trump laid into Powell again, saying people are “VERY disappointed” in him and the Fed. And only last week, Trump lobbed another dig in a tweet that noted inflation was low: “(do you hear that Powell?)”

CONSISTENT

Powell “did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy,” the Fed said in its statement.

Powell appeared before congressional committees twice last week, and the Fed said his comments to Trump were “consistent” with his statements to lawmakers.

“Chair Powell said that he and his colleagues on the Federal Open Market Committee will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis.”

The meeting included Treasury Secretary Steven Mnuchin.

Powell met with Trump in February, and in each of the three following months the two had a brief phone conversation. That compares with the three times his predecessor, Janet Yellen, met President Barack Obama at the White House; Yellen also met with Trump during her final year as Fed chair.

Powell’s has made much more extensive and deliberate efforts to court members of the House and Senate, even as Trump expressed regret for appointing Powell and reportedly explored whether he could remove him.

Fed chairs are appointed to four-year terms by the president, but once confirmed by the Senate are intended to be insulated from White House political pressure over how to manage monetary policy. They can only be removed “for cause,” not over a disagreement over policy.

Meetings between Fed chairs and presidents are not unprecedented but they are infrequent, as opposed to the nearly weekly sessions that central bankers have with the head of the Treasury.

(Reporting by Howard Schneider and Ann Saphir; Editing by Andrea Ricci)

Fed’s Powell: U.S. economy performing ‘very well’ though benefits uneven

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell speaks at his news conference after the two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy in Washington, U.S., June 13, 2018. REUTERS/Yuri Gripas/File Photo/File Photo/File Photo

(Reuters) – The U.S. economy is “performing very well overall,” Federal Reserve Chairman Jerome Powell said in remarks prepared for the opening of a rural housing conference in Washington.

The job market in particular “by many national-level measures…is very strong,” with unemployment at a 50-year low, Powell said, capping a week of widespread market nervousness with a reminder that the U.S. economy continues to expand.

Powell’s brief prepared statement did not address monetary policy or the Fed’s upcoming meeting, at which the central bank will decide whether to raise interest rates and will also release new economic projections for the coming year.

Powell noted to the Housing Assistance Council, a nonprofit that focuses on rural housing issues, that the benefits of the ongoing recovery have not spread evenly around the country but have been concentrated in major cities.

“Some communities have yet to feel the full benefits of the ongoing expansion,” Powell said, with double-digit unemployment still the norm in more than two dozen counties and nearly a third of rural homes without broadband internet.

(Reporting by Howard Schneider in Indianapolis; editing by Diane Craft)