Fed's Powell: Will keep lending 'aggressively' to support economy

Marco Green
March 26, 2020

"Dr. Fauci said something like the virus is going to set the timetable, and that sounds right to me", Powell said, in reference to Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases who is on the White House's coronavirus task force.

The appearance on the popular morning show as many Americans are stuck in their homes marks the Fed chief's first public remarks since he held an unusual Sunday evening press briefing by teleconference on March 15 to announce the central bank had slashed interest rates to nearly zero.

"We know that economic activity will decline, probably substantially, in the second quarter, but I think many expect and I would expect economic activity to resume and move back up the second half of the year", he said. "Very hard to say precisely when that will be, and it will really depend on the spread of the virus".

'When the economy begins to rebound, then we'll be there to make sure that rebound is as strong as possible'.

"There is not anything fundamentally wrong with our economy", he said.

To do its part, the Federal Reserve has taken unprecedented action to bolster the USA economy and smooth markets amid the outbreak.

"The first order of business will be to get the spread of the virus under control and then resume economic activity".

But if? Powell's message may appear extra encouraging if there have been some transparent indicators about when trade may go back to commonplace in The us. He said the Fed can lend $10 for every $1 of cash that the Treasury provides.

He was speaking after the US Senate had approved a $2trn economic relief package overnight that included $456bn for the Treasury to backstop ten times that amount in emergency actions by the Fed in markets for corporate as well as short-term state and local government debt.

That would allow the Fed to boost its lending programs to an astronomical $4.25 trillion.

'Wherever. credit is not flowing, we have the ability in these unique circumstances to temporarily step in and provide those loans and we will keep doing that, aggressively and forthrightly, ' Powell said. Earlier this month, Trump demanded the Fed lead and take further action on interest rates. That's our only focus. "At a definite level, we will be able to get the unfold of the virus underneath keep an eye on".

Other reports by Click Lancashire

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