Federal Reserve Chair Jerome Powell holds a news conference following the Federal Open Market Committee meeting in Washington, December 11, 2019.
Joshua Roberts | Reuters
Federal Reserve Chairman Jerome Powell told Americans on Thursday the central bank is working hard to support them during these unprecedented financial conditions.
“The Federal Reserve is working hard to support you now, and our policies will be very important when the recovery does come, to make that recovery as strong as possible,” Powell said on NBC’s “Today.”
“Really the message is this: This is a unique situation, its not like a typical downturn. We’ve asked people to step back from economic activity really to make an investment in our public health. They’re doing that for the public good and this bill that’s just passed is going to try to provide relief and stability to those people,” Powell added.
The U.S. economy has essentially shut down in recent weeks to address the global pandemic from the fast-spreading coronavirus. The lock down has caused an unprecedented financial and societal disruption. The Senate passed a $2 trillion coronavirus stimulus bill late on Wednesday that includes direct payments to individuals, stronger unemployment insurance, loans and grants to businesses and more health-care resources for hospitals, states and municipalities.
The Federal Reserve has also stepped in in an effort to shore up the economy as the coronavirus outbreak and subsequent business slowdown continued to roil markets. Among other things, the central bank has slashed interest rates to near zero and announced an unprecedented unlimited asset purchase program.
The Fed’s primary small business program is the Main Street Lending Program, where the Treasury is underwriting loans going directly to small business. The Fed is also buying bonds that are backed by auto loans, credit card loans, student loans and some small business loans backed by the Small Business Administration.
Powell emphasized that the Fed’s actions are a way to provide credit to small, medium and large businesses where the lending markets have frozen; however, the central bank’s policies will mostly help facilitate the rebound in the economy, said Powell. For the health piece of the crisis, the Fed chair Powell said he defers to the specialists.
“We would tend to listen to the experts,” said Powell. “Dr. Fauci said something like, the virus is going to set the time table and that sounds right to me.”
“I think the sooner we get the spread of the virus under control, people will regain confidence when they become confident that is the case then they will very willingly open their businesses up, go back to work, the consumer will be spending. So I think the first order of business will be to get the spread of the virus under control, then resume economic activity.”
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