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Hopes For More Federal COVID-19 Relief Coming Any Time Soon Are Dashed

NOEL KING, HOST:

Here's one thing we know for certain. Federal Reserve Chair Jerome Powell says more federal relief is necessary to keep the U.S. economy from faltering during the pandemic. Will we get it, though? We don't know. Yesterday, President Trump said he was calling off all talks with Congress on another aid package. He wants to wait, he said, until after the election. Stock indices promptly fell off a cliff. And later, the president tweeted that Congress should immediately approve a deal for federal funds. NPR's chief economics correspondent Scott Horsley is with us to help figure some of this out. Good morning, Scott.

SCOTT HORSLEY, BYLINE: Good morning.

KING: What is President Trump doing?

HORSLEY: (Laughter) Good question. You know, his announcement yesterday that he was ending talks was really a head-scratcher. I mean, Trump is campaigning on a strong economy. You'd think he'd want to do everything he could to put money in people's pockets before they vote. In fact, over the weekend, while he was hospitalized at Walter Reed, Trump tweeted in all caps that the country wants and needs stimulus. And it was Trump's own treasury secretary who was in negotiations with the House speaker, Nancy Pelosi. So if the president wanted a deal, he could have cut one and then put pressure on Senate Republicans to go along. Instead, he called a halt to negotiations in the afternoon, saying he'd hold off until after the election, only to backtrack hours later, tweeting late last night that he would approve some cherrypicked pieces of the aid package.

KING: Financial markets had clearly been betting that more federal help was on the way. And then yesterday, when the president made his first statement, the reaction was not great.

HORSLEY: No, the Dow tumbled about 375 points. Now, futures markets overnight suggest some of that could be made up this morning as investors try to parse the president's late-night tweets. But you know, Noel, whatever happens on Wall Street, Main Street businesses are really struggling here. The National Retail Federation put out a statement yesterday afternoon saying the pandemic isn't over and neither is the economic crisis it created. The Independent Restaurant Coalition warned its members cannot wait five or six more weeks for help. And they warned that if Congress and the president walk away from negotiations, even more neighborhood restaurants will go out of business.

KING: The Fed chair, Jerome Powell, does not engage in hyperbole, which is why people tend to take him quite seriously. What is he arguing about stimulus?

HORSLEY: The Fed chairman has been saying for months now that additional relief will probably be needed. And yesterday, he told the National Association for Business Economics that even though the country has bounced back faster than many people expected, the recovery still has a long way to go. Remember, almost half of the 22 million jobs that were lost back in March and April have not been replaced yet. And Powell says it could be a long time before the people who work in jobs that require a lot of face-to-face contact are able to go back to work.

(SOUNDBITE OF ARCHIVED RECORDING)

JEROME POWELL: The right thing to do and the smart thing to do for the long run is to continue to support those people as they return to their old jobs or find new jobs in different sectors of the economy.

HORSLEY: Powell says the extraordinary relief measures that Congress passed early in the pandemic really did help. But without more assistance, he says, the recovery will be slower and more painful than it needs to be.

KING: And what does that look like in the long term? What's he worried about?

HORSLEY: He's worried that the longer the recovery takes, the more hardship people will feel, the wider the pain will get spread and the more long-lasting the economic scars might be. And Trump himself seemed to endorse that view last evening. He retweeted a story about Powell's comments with approval. But, you know, if the president really wants Congress to follow the Fed chairman's advice, he's going to have to do more than tweet about it.

KING: NPR's Scott Horsley. Thanks, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.