19 May 2020 16:35
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell said Tuesday that the Fed's lending programs for medium-sized businesses and state and local governments would begin operating by the end of this month. Powell said that while the Fed has received a "good deal of interest" in those programs, if not enough companies or state and local governments seek to borrow, the Fed would consider changes to them. The chairman's comments came before the Senate Banking, Housing and Urban Affairs Committee, which held an oversight hearing on the $2 trillion federal relief package approved in late March. The Fed's Main Street Lending program, announced in March, will extend up to $600 billion in loans to companies with up to 15,000 employees. Treasury Secretary Steven Mnuchin will likely come under tough questioning from senators Tuesday about a small business lending program included in the government's $2 trillion relief package.
Mnuchin said in prepared testimony that so far, the paycheck program has processed more than 4.2 million loans for over $530 billion "to keep tens of millions of hardworking Americans on the payroll." The loans do not have to be paid back as long as the borrowing business uses 75% of the money to cover workers' paychecks. The Fed chair also reiterated that central bank will use "our full range of tools to support the economy in this challenging time." In a "60 Minutes" interview Sunday night, Powell said the Fed's ability to support the financial markets and economy are essentially unlimited, helping to spark a stock market rally Monday. In the "60 Minutes" interview, Powell also repeated his view that Congress and the Fed must be prepared to provide additional financial support to prevent long-term damage to the economy from widespread bankruptcies among small businesses and long-term unemployment. Washington (CNN) The program to lend billions of dollars to small- and mid-sized businesses should be ready to launch by the end of the month, Federal Reserve Chairman Jerome Powell said Tuesday, amid complaints the money has been too slow to reach the public. Both Powell and Treasury Secretary Steven Mnuchin are facing questions from members of the Senate Banking Committee about how they're implementing the $2.2 trillion coronavirus rescue package.
On Monday, a separate congressional oversight panel said that the Fed and Treasury have spent very little of the $500 billion that Congress allocated to support businesses hurt by the coronavirus outbreak. For his part, Fed Chair Powell pledged to reveal the names and other details of the entities that borrow from the emergency programs the central bank has set up to offset the economic hit from the viral outbreak. In his prepared testimony, Powell said the central bank will disclose the amounts borrowed and the interest rates it levies under its programs to provide credit for large corporations, state and local governments, and medium-sized businesses. Powell said the Fed will also name the companies that benefit from its two facilities that have started to purchase corporate debt, as well as its program to purchase municipal bonds and a facility that will buy securities backed by auto, student, and credit card loans. The Fed chair also reiterated that central bank will use "our full range of tools to support the economy in this challenging time." In a "60 Minutes" interview Sunday night, Powell said the Fed's ability to support the financial markets and economy are essentially unlimited, helping to spark a stock market rally Monday.
In the "60 Minutes" interview, Powell also repeated his view that Congress and the Fed must be prepared to provide additional financial support to prevent long-term damage to the economy from widespread bankruptcies among small businesses and long-term unemployment. (Bloomberg)--Federal Reserve Chairman Jerome Powell said the central bank is ready to use all the weapons in its arsenal to help the U.S. economy endure the coronavirus pandemic, as attention shifts to whether Republicans and Democrats will agree to more fiscal aid. "We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response," Powell said Tuesday in remarks to the Senate Banking Committee. Republicans and Democrats are arguing over the scale and timing of additional fiscal stimulus after Congress passed a record plan of about $3 trillion to aid the economy during the pandemic, which has cast millions out of work as businesses shuttered and Americans stayed home to limit contagion. Working with the Treasury, the central bank has launched unprecedented support for markets and the economy since mid-March. The Fed is still trying to launch four of the nine facilities, including one aimed at Main Street that will buy bank loans extended to mid-size businesses. "We expect all of them to be stood up and ready to go by the end of this month," Powell said of the remaining programs during questioning at the hearing. Powell, a Republican whom Trump nominated to the top Fed job, has already said he thinks governments should do more, and has said the Fed is willing to go further if needed to support the economy.