US Federal Reserve Chairman Jerome Powell said that the case for fiscal policy right now is "very strong" as millions of Americans are set to lose pandemic relief benefits by the end of this year.
With the expiration of unemployment benefits, there is a need for households and businesses to have fiscal support, Powell said on Wednesday at a virtual press conference after the Fed concluded the final policy meeting of 2020.
"The case for fiscal policy right now is very, very strong and I think that is widely understood I would say now.
"The details of it are entirely up to Congress," Xinhua news agency quoted the Chairman as saying.
Powell said the issue now is getting through the next four to six months with fiscal support as he expects significant numbers of people to be vaccinated by the end of the second quarter.
"You have to think that sometime in the middle of next year you will see people feeling comfortable going out and engaging in a broader range of activities," he said.
Next Round of a Covid-19 Relief Package
The Fed Chair's remarks came as Democratic and Republican lawmakers have made progress in the negotiations on the long-waited next round of a Covid-19 relief package.
"We made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities," Senate Majority Leader Mitch McConnell said on the Senate floor on Wednesday morning.
Without a new relief package, millions of Americans will soon lose their unemployment benefits and begin to face hardships like eviction and foreclosure by the end of the year.
The Fed on Wednesday kept its benchmark interest rate unchanged at the record-low level of near zero while expecting rates to remain at least through 2023.