Fed Chair Powell says more actionmay be needed to help fend offlasting economic damage

Federal Reserve Chair Jerome Powell cautioned on Wednesday that the US economic recovery from the fallout of the coronavirus would likely be slow and require more fiscal stimulus.

Jerome Powell

The recovery "may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems," Powell said in an event for the Peterson Institute for International Economics.

He continued: "Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery."

Powell's remarks came two months into the worst economic downturn since the Great Depression. In April, the US economy lost a record 20.5 million jobs and saw the unemployment rate spike to 14.7%.

Long stretches of unemployment can leave families in greater debt, Powell said. And losing thousands of small and medium-sized businesses "would destroy the life's work and family legacy of many business and community leaders and limit the strength of the recovery when it comes," he said.