Federal Reserve chair Jerome Powell said that additional federal relief is need to ensure continued stability in the American economy, which benefited from the CARES Act to prevent a widespread “downward spiral,” the Associated Press reports.

Powell noted that the CARES Act, passed in March at the start of the pandemic, prevented a domino effect in lost jobs causing a reduction in spending which ultimately would have collapsed the US economy.  The relief package of financial aid for businesses, federal supplemental unemployment, mortgage/rent relief and direct payments for US households, phased out from July through October.

“The expansion is still far from complete.  Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth,” Powell said in a speech to the National Association for Business Economics.

White House officials and House Democrats, led by Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi, respectively, have been trying to craft a follow-up aid package but have been unsuccessful in doing so.  Last reports had the two sides significantly apart, with the White House saying it won’t budge from a $1.6 trillion figure and Democrats proposing $2.4 trillion in aid.

The Democratic-led House passed a second aid bill in May, but Senate Majority Leader Mitch McConnell has been unable to gain any consensus among Senate republicans for additional relief for American families and small business.

In his speech, Powell noted that the economy was relatively stable in May and June, largely thanks to support from spending spurred by the CARES Act.  That economic boost wore off, leading to a relatively weak jobs report in September.