Powell to face pressure from lawmakers over stimulus this week

Bloomberg reports that Fed Chair Jerome Powell can expect pressure to support the stimulus plan of Democratic lawmakers when they host him this week on Capitol Hill for the first time since regaining control of Congress.

In testimony before the Senate Banking Committee on Tuesday and the House Financial Services panel the following day, Powell will probably play down the risk of inflation despite the size of President Joe Biden’s $1.9 trillion coronavirus relief proposal.

The Fed chief could cite the millions of Americans still out of work due to the pandemic, and repeat that the central bank is not thinking about withdrawing monetary policy support anytime soon.

The fiscal package being weighed by Congress would amount to the largest in U.S. history. That’s raised concern among some economists in both Democratic and Republican circles that its size could lead to unwanted price pressures and financial-market excesses.

Democrats will probably press Powell to repeat his warning that the economy needs more aid. Republicans in response could push him to discuss the risks of prolonged policy stimulus. Volatility in the shares of firms including GameStop Corp. have fanned fears of a bubble.