Federal Reserve Chairman Jerome H. Powell said on Wednesday that policymakers might need even stronger fiscal and monetary measures to restore the economic downturn that cost at least 20 million jobs.

“The recovery may take some time to gather momentum,” which can turn the ongoing liquidity problem into “solvency problems,” Powell said in a webcast event with the Peterson Institute for International Economics.

Coronavirus has triggered a situation that is unlike previous recession the US endured as such Congress is required to respond with more.

In the first quarter, the Fed cut its benchmark rate to near zero and Congress passed $3 trillion for the stimulus package. He said,

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks.”

As for the negative interest rates, which President Donal Trump has been in favor of, Powell said, “it’s not something that we’re considering.”

Traders meanwhile have been pricing the rates edging into negative territory by the end of 2020 or in early 2021.

The prepared remarks from the central bank came days after the Labor Department reported nonfarm payroll fell by 20.5 million last month and the unemployment surged to 14.7%, both the worst since the Depression.

“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” added Powell while noting that

“the job gains of the past decade have been erased.”

GDP is expected to plunge as well by record levels in the second quarter with Goldman Sachs forecasting quarter-on-quarter annualized hit in Q2 to be -39% but it will be followed by a faster recovery in Q3 +29%.

But according to Powell, this recovery “may take some time to gather momentum,” as the longer the health risks persist the more likely business will fail and households will be short for income.

The worst-case outcome will leave the economy in “an extended period of low productivity growth and stagnant incomes.”

“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 said which could be a direct call for Congress to allocate more funds for economic relief.

“This tradeoff is one for our elected representatives, who wield powers of taxation and spending.”

These remarks from the central bank chief resulted in both the Dow Jones Industrial Average and S&P 500 siding more than 3% from yesterday’s high.

Bitcoin meanwhile jumped above $9,100, up 2.33% while managing the daily trading “real” volume of $1.5 billion.

With this latest development, bitcoin and stocks continue to decouple as such the equity market is losing relevance for the crypto market.

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