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The Federal Reserve is running out of economic assistance opportunities

29 October 2020
2 min.
The Federal Reserve is running out of economic assistance opportunities

Federal Reserve asked to provide tax assistance to America

With the expiration of the key provisions of the 2.2 trillion dollars CARES Act, which Congress extended in March, the Federal Reserve Board is once again hoping for it as the main economic support system. The central bank maintained a free policy and continued to offer its lending and market stimulation programmes and decided that it would not raise short-term interest rates for many years.

However, none of the Federal Reserve officials will ever confirm that the monetary policy stockpile is running out, and in fact they will insist otherwise.

The chief economist at Moody’s Analytics said: "What's left is actually on the verge of being done, and they also have little room for action on monetary policy".

Of course, officials often turn to Congress for help.

At the beginning of October, the chairman of the National Association for Business Economics said in his speech that delaying the allocation of additional funds for rescue may cause the economy to recover slowly and also bring difficulties for households.

In October, the Fed governor said that Congress cannot go through these difficulties, which means that its economy is at risk.

For his part, he added that warned more often before the pandemic about the unsustainable path of fiscal policy on debt and deficit. This is no longer the case as the number of coronavirus infections continues to rise and the economy is having difficulty returning to pre-crisis conditions.

The head of global policy also said that the Fed will remain in place for many more years and that the approach to average inflation will have a major impact, but that this will only happen if the economy starts to strengthen.



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