When asked what keeps him awake at night, Mr. Powell said that “there’s a pretty substantial tent city” he drives past on his way home from work in Washington. “We just need to keep reminding ourselves that even though some parts of the economy are just doing great, there’s a very large group of people who are not.”
Given the pandemic’s role in exacerbating inequality, both Mr. Powell and Ms. Georgieva said it was critical to support workers and make sure they can find their way into new and fitting jobs.
The Fed chair said policy tended to focus too much on short-term, palliative measures and not enough on longer-term solutions that help to expand economic possibility.
“I think we need to, really as a country — and I’m not talking about any particular bill — invest in things that will increase the inclusiveness of the economy and the longer-term potential of it,” Mr. Powell said. “Particularly invest in people, so that they can take part in, contribute to and benefit from the prosperity of our economy.”
Those comments come as the Biden administration is pushing for an ambitious $2 trillion infrastructure package that would include provisions for labor market training, technological research and widespread broadband. The administration has proposed paying for the package by raising corporate taxes.
“For quite some time, we have been in favor of more investment in infrastructure. It helps to boost productivity here in the United States,” Ms. Georgieva said, calling climate-focused and “social infrastructure” provisions positive. She said they had not had a chance to fully assess the plan, but “broadly speaking, yes, we do support it.”
But the White House’s plan has already run into resistance from Republicans and some moderate Democrats, who are wary of raising taxes or engaging in another big spending package after several large stimulus bills.