Powell stresses importance of lending programs, calls economic outlook ‘extraordinarily uncertain’ – By Jeff Cox (CNBC) / Nov 30 2020
- Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin are speaking before Congress this week as part of mandated updates on CARES Act funding.
- The act provided trillions of dollars in funding to help the economy through the coronavirus pandemic.
- In prepared remarks, Powell stressed the importance of the Fed’s lending programs through the act. Several of those programs will end Dec. 31. Mnuchin said the funds would be better spent elsewhere.
- The central bank chair offered a lukewarm view of the economy, saying the outlook has become “extraordinarily uncertain.”
Federal Reserve Chairman Jerome Powell emphasized the importance of the lending programs it has deployed during the coronavirus pandemic, telling senators in testimony to be delivered Tuesday that they’ve been integral in keeping the economic fallout from being worse.
Treasury Secretary Steven Mnuchin, who will appear twice on Capitol Hill with Powell this week, has said that the legislation that enabled the programs does not permit them to run past Dec. 31. The two officials are speaking as part of required updates on the CARES Act funding initiatives Congress passed to aid the economy through the pandemic.
Many of the key programs that the central bank has used since March are expiring at the end of the year, and the Fed will be forced to return the funding that supports them.
“These programs serve as a backstop to key credit markets and have helped restore the flow of credit from private lenders through normal channels,” Powell said in prepared remarks for the Senate Finance Committee. “We have deployed these lending powers to an unprecedented extent.”