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Federal Reserve Chair Powell says ‘nothing more important’ to economy than vaccinating Americans

Powell’s comments come as the Biden administration ups pressure on Congress to pass relief bill with massive funding for vaccines

Federal Reserve Chair Jerome H. Powell said on Wednesday that true joblessness is higher than its 6.7 percent rate in December due to the huge numbers of people the pandemic drove from the workforce. (Al Drago/Pool/AFP/Getty Images)

Federal Reserve Chair Jerome H. Powell said Wednesday that getting Americans vaccinated is the most important thing to help the economy, comments that could boost President Biden’s push to pass a massive new relief package that includes big spending on vaccines.

“There’s nothing more important to the economy right now than people getting vaccinated,” Powell said at a news conference following the Fed’s regular policy meeting.

“That is really the main thing about the economy, is getting the pandemic under control, getting everyone vaccinated, getting people wearing masks and all that,” Powell added. “That’s the single most important economic growth policy that we can have.”

Powell’s comments came on the same day Biden’s covid-19 response team held its first public briefing, with senior adviser Andy Slavitt emphasizing that they cannot reach their goal of vaccinating all Americans unless Congress acts to pass Biden’s $1.9 trillion relief package.

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The package includes $160 billion for a national vaccination program, expanded testing, more public health jobs and other steps to curb the pandemic that has claimed more than 427,000 American lives and upended the economy.

Slavitt said the administration can reach its initial goal of getting 100 million people vaccinated within 100 days without congressional action, “but that’s just the start.”

“In order to get all Americans vaccinated we need Congress to provide funds,” Slavitt said, including for expanding production and establishing more vaccination sites.

Congress has already devoted tens of billions of dollars to vaccine production and distribution, but as the pace of vaccination lags behind what the Trump administration had promised and new variants of the coronavirus emerge, demand for vaccinations is far outpacing supply.

Powell and other Fed leaders have long emphasized that the economy will not fully heal until the pandemic is under control. But Wednesday marked the first time central bankers, in a statement released after their policy meeting, specified “progress on vaccinations” as core to the recovery.

”We haven’t won this yet,” Powell said. “We clearly can, but we’re going to have to stay focused.”

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The need for more money for vaccinations could prove a compelling argument in favor of passing Biden’s relief package, and a pressure point to try to win Republican support. Despite some discussion of breaking off vaccines and stimulus checks as a stand-alone bill, Biden said earlier this week he did not want to do that.

Overall, Biden’s relief package has gotten a frosty reception from many Republicans on Capitol Hill, including Senate Minority Leader Mitch McConnell (R-Ky.), who dismissed it as an overly expensive and untargeted wish list of liberal priorities. In addition to vaccine funding, the package includes an extension of unemployment benefits that would otherwise expire in mid-March, $1,400 stimulus checks, an increased child tax credit, an increase in the federal minimum wage to $15 an hour, more than $130 billion for schools and more.

But the need for spending on vaccines has emerged as an area of bipartisan consensus in meetings Biden administration officials have held with groups of lawmakers in the Senate and the House.

Because of the widespread GOP opposition to the overall package, Democratic leaders in both chambers are making plans to try to advance the legislation under special rules that could allow it to pass with a simple majority vote in the Senate, meaning no Republican support would be required. Democrats say, however, that they still hold out hope for GOP support for the bill, and bipartisan discussions are continuing.

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Overall, Powell said the pace of economic activity and employment had moderated in recent months. That pain has been most concentrated in service sectors — restaurants, bars, hotels — that have borne the brunt of the pandemic. December marked the first month of job losses since the recovery began in May.

For months, Powell has urged lawmakers to keep up the direct relief to struggling households and businesses, warning against the risks of withdrawing support too soon.

That’s especially the case, Powell said, for service-sector workers, including many women and people of color, whose jobs may return only once the health crisis ends. Still, Powell routinely stops short of outlining what should or should not go into another relief bill, leaving those discussions to the White House and Congress.

His overarching message is just to keep the aid flowing.

“Fiscal policy has been absolutely essential, and when we look back, we’ll see a strong and sustained fiscal policy response,” Powell said Wednesday. “As I mentioned, we’re a long way from a full recovery.”

Powell told reporters that he had received his first vaccine shot and was awaiting the second.

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