with Brent D. Griffiths

Jay Powell for months has signaled to lawmakers they need to provide more emergency relief to prop up an economy rocked by the pandemic. The Federal Reserve chair on Wednesday delivered his closest message yet to an S.O.S.

Powell has carefully avoided appearing to give explicit policy advice to Congress. With the resurgence of the coronavirus stressing an already-fragile recovery and lawmakers mired in disagreement about the size and shape of the next installment of federal aid, the central bank chief suggested urgency is growing for lawmakers to reopen their spending spigot.

“Fiscal policy can address things that we can’t address,” Powell said at a virtual news conference Wednesday afternoon after Fed officials concluded a two-day meeting by keeping interest rates close to zero.

Responding to a question about whether it is now “up to the fiscal authorities at this point to rescue the economy,” Powell said he “would not disagree with the importance of fiscal policy.”

And in what could have been an attempt to give cover to Republicans raising hackles about the growing debt pile, he credited earlier congressional relief with averting an even more severe economic shock. “It’s really helping. It’s going to stand up very well to scrutiny down the years,” Powell said. “Congress’s very fast and very openhanded response I think has really helped… As I’ve said, very likely, more will be needed from all of us. I see Congress negotiating now over a new package, and I think that’s a good thing.”

Powell emphasized the pandemic will dictate the trajectory of economic recovery.

Since the Fed chair’s last news conference on June 10, coronavirus cases have spiked across the South and West, forcing states to reverse reopening plans. The renewed restrictions, and freshly stoked popular fear of the pandemic, sent the nascent economic rebound into a sputter.

Powell said the Fed is monitoring the slowdown closely through real-time measures of activity, including credit card data, restaurant reservations, hotel occupancy rates and consumer surveys. He called the pandemic and its fallout “the biggest shock to the U.S. economy in living memory.” 

The second-quarter GDP report coming out this morning is expected to add grist to the claim, with economists projecting it to show activity dropped at a 35 percent annual rate from April to June.Moreover, experts warn that Thursday’s GDP release shouldn’t just be seen in the rear view mirror, but should stand as a cautionary tale of what’s at stake if the recovery slips away,” Rachel Siegel and Andrew Van Dam write

Powell said the path forward remains “extraordinarily uncertain” and relies on the course of the virus. While that amounted to “a ‘duh’ comment,” Capital Alpha’s Ian Katz writes in a note, “it’s also a signal to the public and public officials that all the highfalutin Fed lending and liquidity programs in the world won’t matter if people are too sick or too afraid to buy and do stuff.” 

Indeed, Powell also noted the monetary policymakers at the Fed are doing everything they can to backstop the recovery, including by keeping short-term interest rates near zero. At his last press conference, Powell said the Fed isn’t even “thinking about thinking about” raising them. On Wednesday, for what it’s worth, he went a rhetorical beat further: “We’re not even thinking about thinking about thinking about raising rates,” he said.


And Powell said the Fed remains “committed to using our tools to do what we can and for as long as it takes” to limit the pandemic’s economic fallout. Those include boosting the Fed’s purchases of Treasury securities and mortgage-backed securities “at least at the current pace over the coming months,” per Rachel Siegel. "The Fed has said its support of the markets should remain in place to help safeguard the broader financial system during the pandemic.”

But the central bank chief also acknowledged the Fed can’t battle the economic crisis alone. David Kelly, chief global strategist at JPMorgan Asset Management, described Powell on a conference call as “a card player playing poker, and he’s been all in for a while here.” But he said Powell made clear “the truth is the economy is being determined, a., by the course of the pandemic, and b., fiscal policy.”

Powell’s comments come at a critical moment in the debate on Capitol Hill.

Senate Republican leaders continue struggling to forge consensus within the GOP conference on their version of an emergency relief package. The most divisive issue they face: The trillion-dollar price tag.

“From the presidentially ambitious Sens. Ted Cruz (R-Tex.) and Josh Hawley (R-Mo.), to onetime deficit hawks like Sen. Patrick J. Toomey (R-Pa.), conservatives are abandoning the president as his top aides struggle with negotiations on a pandemic relief bill,” Paul Kane writes. “Ignoring their own record of support for adding trillions of dollars to the national debt, these conservatives have signaled that they think, in a post-Trump Republican Party, that deficits will return to the forefront just as they did in the first years of the Obama administration.”

It’s hardly clear Powell, a registered Republican himself, will prove more convincing to this bunch on the need for more spending than aides to the president who nominated him. At a minimum, Powell’s warning about a stalling recovery and the need for more support should brace business leaders and investors who still form the backbone of the GOP’s major donor class. Investors on Wednesday focused instead on his pledge to provide more monetary stimulus. The S&P 500 climbed 1.2 percent on the day.

Latest on the federal pandemic response

Relief plan talks are a mess.

The parties remain trillions of dollars apart: “A meeting between top White House officials and Democratic leaders ended with no agreement on extending emergency unemployment benefits that expire Friday or on reviving a moratorium on evictions that lapsed last week. That means some 20 million jobless Americans will lose $600 weekly enhanced unemployment benefits that Congress approved in March, which could send the economy reeling,” Erica Werner, Jeff Stein, Seung Min Kim and Rachael Bade report.

A short-term patch is off the table, for now: Democrats shot down the idea of a short-term fix for unemployment insurance and the eviction moratorium, which [Trump] had announced earlier he would support."

Talks break down: Senate Majority Leader Mitch “McConnell is leaving negotiations with Democrats to Trump administration officials. The whole process has been overtaken by increasingly bitter partisanship, which was on display on the Senate floor as McConnell and [Senate Minority Leader Charles E.] Schumer traded insults.”

  • The elephant may not be in the room, but something else is: “It’s like a giraffe and a flamingo,” House Speaker Nancy Pelosi told Schumer, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, Politico's Jake Sherman reports. “They’re both at a zoo. A dumb person may think they could mate for offspring. A smart person knows that’s impossible. That’s our bills. They’re unable to mate.”
  • McConnell later torched Pelosi: "She’ll just refuse to legislate until the election and wish American families good luck dealing with the pandemic.”

Party on?: McConnell told PBS NewsHour last night he remains hopeful, “This is only Wednesday.” But he also said there are about 20 GOP senators who would prefer not to vote for any bill.

The administration's odd couple: “[White House chief of staff Mark] Meadows and {Treasury Secretary Steven] Mnuchin hail from different corners of the GOP. One was a hard-line House conservative who regularly tanked spending bills pushed by his own party leaders; the other previously had interests in Wall Street and Hollywood and has been deeply enmeshed in enacting legislation doling out trillions to respond to the coronavirus crisis," Politico's John Bresnahan and Marianne LeVine report of duo leading White House negotiations.

Coronavirus fallout

More from the U.S.:
  • Nearly 150,000 Americans have died: “It took two months for covid-19 to kill 50,000 Americans, and nearly half of those deaths took place in one state, New York. On Wednesday, the death toll approached 150,000, a milestone of trauma and tragedy that marks the coronavirus’s leap from big cities into suburbs and rural areas, especially in Texas, Florida, California and Arizona,” Marc Fisher and Chris Dixon report.

From the COVID Tracking Project:

  • 30 million go hungry. “Food insecurity for U.S. households last week reached its highest reported level since the Census Bureau started tracking the data in May, with almost 30 million Americans reporting that they’d not had enough to eat at some point in the seven days through July 21,” Bloomberg's Maeve Sheehey reports. “In the bureau’s weekly Household Pulse Survey, roughly 23.9 million of 249 million respondents indicated they had ‘sometimes not enough to eat’ for the week ended July 21, while about 5.42 million indicated they had ‘often not enough to eat.’”
  • Small businesses face mass closures without more aid: “Most firms have already run out of the money they secured from the $600 billion Paycheck Protection Program, according to a survey released this week from the National Federation of Independent Business, a leading trade group for small U.S. firms. The federation also found in early July that 23 percent of respondents expected to be out of business within six months unless economic conditions change,” Reuters's Ann Saphir and Jonnelle Marte report.
  • Masks are now required on the House floor: “[Pelosi] announced that all lawmakers will now be required to wear a mask while appearing on the chamber floor, a decision spurred by the news that a Republican congressman who has spurned facial coverings had tested positive for the coronavirus.”
  • That congressman is now saying he'll take hydroxychloroquine: Rep. Louie Gohmert (R-Tex.) “told Fox News host Sean Hannity that he and his doctor had already agreed on a treatment: Hydroxychloroquine, the antimalarial drug pushed by [Trump] and his allies despite warnings from the Food and Drug Administration and medical experts that it isn’t effective as a coronavirus treatment and could carry significant health risks,” Tim Elfrink reports.
From the corporate front:
  • Boeing revenue plunges 25 percent: “Boeing reported a $2.4 billion net loss for the second quarter of 2020 on Wednesday morning and sharply cut commercial aircraft production,” Aaron Gregg reports. “The company’s operating loss came in at $4.79 per share, worse than analysts’ already-low expectations. Boeing stock was down 2.8 percent by early afternoon even as major stock indexes traded higher.”
  • JetBlue CEO Robin Hayes warns of “day of reckoning” for airlines: “Shares of JetBlue were down more than 3 percent,” CNBC's Kevin Stankiewicz reports. “The New York City-based airline reported …. that its second-quarter revenue fell 90 percent compared with the year-ago period as a result of the pandemic.” Hayes said the industry will recover but is uncertain about when that will happen.
  • Democrats probe aviation contractors. They are looking into whether the companies “violated provisions of the Cares Act by laying off thousands of workers, despite receiving millions of dollars from the government to keep workers on the job,” Lori Aratani and Ian Duncan report. “An analysis by the House Select Subcommittee on the Coronavirus Crisis found that more than $500 million in federal funds went to four companies that have laid off more than 7,500 workers.”
  • GM says it should be able to pay off $16 billion loan if recovery continues: If the recovery continues, GM expects adjusted operating earnings in the second half of the year in the range of $4 billion to $5 billion, with the third quarter slightly stronger than the fourth quarter, [Chief Financial Officer Dhivya Suryadevara] told analysts … She said in that scenario GM should generate cash flow of between $7 billion and $9 billion during the second half,” Reuters's Nick Carey and Ben Klayman report.

Money on the Hill

Tech CEOs Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg visited Capitol Hill to discuss their companies' dominance in the tech market. (The Washington Post)
Tech CEOs get grilled on the Hill.

Four of the industry's most powerful executives were pressed on antitrust issues: “The leaders of Amazon, Apple, Facebook and Google took a brutal political lashing Wednesday as Democrats and Republicans confronted the executives for wielding their market power to crush competitors and amass data, customers and sky-high profits,” Tony Romm reports.

“The rare interrogation played out over the course of a nearly six-hour hearing, with lawmakers on the House’s top antitrust subcommittee coming armed with millions of documents, hundreds of hours of interviews and in some cases the once-private messages of Silicon Valley’s elite chiefs. They said it showed some in the tech sector had become too big and powerful, threatening rivals, consumers and, in some cases, even democracy itself.”

Two key moments:

Facebook CEO Mark Zuckerberg was hammered over internal emails: “Rep. Jerrold Nadler (D-N.Y.), the top lawmaker on the House Judiciary Committee, brought up a 2012 message in which Zuckerberg apparently said he sought to acquire Instagram, which at the time was a rival photo-sharing app, out of fear that it could ‘meaningfully hurt us.’ Later, Rep. Joe Neguse (D-Colo.) pointed to other Facebook communications that described the company’s acquisition strategy generally as ‘a land grab.’”

And Amazon CEO Jeff Bezos made a stunning admission: “Amazon, meanwhile, faced withering scrutiny over allegations it may have misled the committee. The e-commerce giant previously told lawmakers it does not tap data from third-party sellers to boost sales of its own products. But Democratic Rep. Pramila Jayapal (Wash.) brought up public reports that indicated to the contrary, prompting Bezos — delivering his first-ever testimony to Congress — to offer a striking admission of potential fault.”

  • “What I can tell you is we have a policy against using seller-specific data to aid our private label business,” said Bezos, who also owns The Washington Post. “But I can’t guarantee you that policy has never been violated.”

Market movers

Kodak's chairman addresses jump in trading before big government deal.

The photography giant's foray in drugmaking was supposed to be under wraps: “Trading activity picked up in shares of Eastman Kodak before the company announced on Tuesday that it had been tapped by the Trump administration to manufacture drug ingredients, data from FactSet shows,” CNBC's Pippa Stevens reports.

“On Monday, 1,645,719 shares traded hands, far surpassing Friday’s 74,893 trades, and Thursday’s 80,840 trades. Not including this week, over the last year the average daily trading volume has been 236,479, according to FactSet.”

  • “I mean obviously this has been a pretty tight kept secret even until the last day,” Executive Chairman James Continenza said on CNBC's “Squawk Box." “I couldn’t tell you what influenced that [the volume] or didn’t ... we knew for over a week."

Campaign 2020

Some Biden allies are behind a stop Kamala Harris campaign.

Some top donors are among those hoping to keep her off the ticket: “This disgruntled group of at least a dozen Biden backers, including a few of his top donors, initiated the move against Harris (D-Calif.) close to a month ago, just weeks before a decision is expected,” CNBC's Brian Schwartz reports.

“In some cases, her foes have taken their concerns directly to members of Biden’s VP search committee, led by former Sen. Chris Dodd, Los Angeles Mayor Eric Garcetti, Rep. Lisa Blunt Rochester (D-Del.) and Cynthia Hogan, who previously served as counsel to the presumptive Democratic nominee when he was vice president under President Barack Obama."

  • What's behind the axe grinding: “Some remain bitter about her attacks on Biden during primary debates last year, saying they bring into question her loyalty to the former vice president. Others argue that she’s too ambitious and that she will be solely focused on becoming president herself. Many of these Biden associates have been pushing alternatives to Harris, such as Rep. Val Demings (D-Fla.) Rep. Karen Bass (D-Calif.), former U.S. ambassador Susan Rice, and Sen. Tammy Duckworth (D-Ill.).”
  • Key quote: “She would be running for president the day of the inauguration,” Florida businessman and bundler John Morgan told CNBC. “For me loyalty and friendship should mean something. But as Bill Clinton once told me, the No. 1 cause of Alzheimer’s is ambition,” he added, while noting he’s in favor of Demings.

A number of prominent Democrats blasted the behind-the-scenes effort and came to Harris's defense on Twitter. From Preet Bharara, former U. S. attorney for the Southern District of New York: 



  • The Bureau of Economic Analysis releases an estimate for U.S. GDP in Q2
  • The Labor Department releases weekly jobless claims
  • Amazon, Apple, Alphabet, Ford, United Parcel Services, Yum! Brands, United States Steel, Gilead Sciences, Kellogg, Anheuser-Busch InBev, ConocoPhillips, Comcast, Kraft Heinz, Eli Lilly, Grubhub, MGM Resorts International are among the notable companies reporting their earnings


  • U.S. consumer spending for June is released
  • Merck & Co., Caterpillar, Under Armour, AbbVie, Chevron, Fiat Chrysler, Exxon Mobil, Tiffany & Co. and Pintrest are among the notable companies reporting their earnings

The funnies

Bull session