(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said more fiscal support was urgently needed to support the U.S. economic recovery, following President Donald Trump’s unilateral decision to halt talks for another round of aid.
“Whatever Congress can do with the executive branch -- come together aggressively to put money in the hands of people who have lost their jobs and to support small businesses so that we don’t have this continuing wave of bankruptcies across the economy -- it’s just vital that they move quickly, whatever they do,” Kashkari said in an interview Wednesday on CNBC.
Trump’s decision Tuesday to walk away from talks with Democrats amid differences over the size of another fiscal relief package -- even though hours later he appeared to reverse course -- likely ended the chances of a deal before the Nov. 3 election. The president’s announcement followed a speech by Fed Chair Jerome Powell earlier in the day in which he made one of his strongest appeals to date on the need for lawmakers to do more.
Kashkari characterized the current state of the U.S. job market amid the ongoing coronavirus pandemic as “roughly as bad as it was at the peak of the Great Recession” and argued that the country’s banks could eventually run into trouble if Congress and the White House fail to extend more fiscal support to American households and businesses.
“How have Americans been able to pay all their bills? It’s because Congress has been so aggressive,” Kashkari said. “If they don’t continue that, these losses roll up into the banking sector, and nobody knows how big those losses will ultimately be, and whether or not the banks will need more direct support.”
(Updates with additional Kashkari comment from fourth paragraph.)
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