Fed Chairman Jerome Powell Says More Stimulus Needed to Avoid ‘Tragic’ Consequences

Federal Reserve Chair Jerome H. Powell delivered a message to his fellow policymakers on Tuesday: Faced with a once-in-a-century pandemic that has inflicted economic pain on millions of households, go big.

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Mr. Powell said in remarks before the National Association for Business Economics.

“Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth,” he said. “By contrast, the risks of overdoing it seem,...

Strong financial support from the government and the Federal Reserve have spurred a solid recovery from the pandemic recession, but the rebound may falter without further aid, Fed Chair Jerome Powell warned Tuesday.

Powell said that government support — including expanded unemployment insurance payments, direct payments to most U.S. households and financial support for small businesses — has so far prevented a recessionary “downward spiral” in which job losses would reduce spending, forcing businesses to cut even more jobs.

But the U.S. economy still faces threats, and without further support...