Third Stimulus Check: Treasury Secretary Wants A 'Big Package', Pushes Stock Futures Up

Treasury Secretary Janet Yellen on Thursday called for a “big package,” arguing that it would help push the U.S. economy back to full strength.

Yellen, the principal economic adviser to President Joe Biden, renewed calls for the Democrats’ $1.9 trillion proposal that she believes will help America get back to full employment by 2022. Her statement comes despite analysis suggesting that the U.S. economy’s growth is off to a faster start than previously anticipated.

“We think it’s very important to have a big package [that] addresses the pain this has caused – 15 million Americans behind on their rent, 24 million adults and 12 million children who don’t have enough to eat, small businesses failing,” Yellen told Sara Eisen on CNBC’s “Closing Bell.”

“I think the price of doing too little is much higher than the price of doing something big,” Yellen said. “We think that the benefits will far outweigh the costs in the longer run.”

Yellen also said she’s not worried about potential inflation if Congress approves the $1.9 trillion plan, which includes provisions for $1,400 stimulus checks.

“Inflation has been very low for over a decade, and you know it’s a risk, but it’s a risk that the Federal Reserve and others have tools to address,” she said. “The greater risk is of scarring the people, having this pandemic take a permanent lifelong toll on their lives and livelihoods.”

Yellen’s calls for a large stimulus package may push stock futures up. Many on Wall Street believe that the market’s rally could extend higher if Congress approves more stimulus packages.

“A big part of our rationale for additional gains from here is dependent on a continued belief that the major drivers that helped carry the market to current levels will remain intact,” Scott Wren, Wells Fargo’s senior global market strategist, wrote in a statement. “One of the drivers is additional stimulus from Congress that will help bridge the gap between now and when vaccines are widely distributed.”

The House of Representatives aims to pass the $1.9 trillion bill by the end of February without Republican support using the budget reconciliation process. Democrats hope to have the bill signed into law by President Biden before federal unemployment benefits expire the week ending March 14.