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Pelosi: Trump ignoring Powell on stimulus needs

Yahoo Finance’s Brian Cheung joins The Final Round panel to discuss the latest news from Federal Reserve Chair Jerome Powell as President Trump calls of stimulus talks until after the November election.

Video Transcript

SEANA SMITH: And now I also want to bring up the fact that we heard from Fed chair Jay Powell earlier today. And he was saying the exact opposite. He was urging policymakers to offer more support to the economy. And he was saying that it is needed in order to keep the economic recovery on track.

Brian Cheung joins us now with more on this. And Brian, as it stands at this point now, Trump saying that the talks are off, what does this mean for the economy and what we heard in contrast to Jay Powell earlier today?

BRIAN CHEUNG: Well, it seems like I feel like I've aged 10 years just in this one day. But earlier this morning, we did hear from Fed chairman Jay Powell in remarks to the National Association of Business Economics.

And it seemed like at the time, again, which was just this morning, that there was optimism on Constitution Ave that there could be some fiscal package coming on Capitol Hill, hence why Fed chairman Jay Powell was saying, go big if you do make that fiscal package. Here's what he had to say this morning.

JAY POWELL: The risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.

BRIAN CHEUNG: And in contrast, the Fed chairman said that too little support would lead to a weak recovery, which appears to be the case now the president has ruled out effectively any sort of stimulus package before the election, which means that, obviously, it might be not until February of next year, depending on whether or not that will be a President Biden or a President Trump, to get some sort of help.

So the Federal Reserve making it very clear that that would not be a very good thing. We've heard that from effectively every member of the 17-member Federal Open Market Committee. There's a compilation that I've got on Yahoo Finance.

But the strongest words that we heard were from Chicago Fed president Charlie Evans at the beginning of September. He said partisan politics threatens to endanger additional fiscal relief. A lack of action or an inadequate one presents a very significant downside risk to the economy today. And it does seem like, with the president ruling out that additional stimulus, that does appear to be the case for right now.