Psql uses a system viewer to show its output in the console. In bash it likely uses less for the scrollable/page-able features it provides. To use a different viewer or use different settings, you just need to set the PAGER environment variable.
Running psql to use less with the -S or --chop-long-lines option seemed to work for me:
PAGER="less -S" psql
You can also toggle this feature while viewing output in less by typing -S and Enter.