Fed Powell: Congressional support is critical at this time

Author: Greg Michalowski | Category: Central Banks

Fed Powell testifies to House panel on the 2nd day of hearing

The Fed's Powell has begun his Q&A to the House financial services panel. It is largely expected that he mirrors responses from yesterday.
  • A concern of Congress withdrew support to quickly
  • congressional support is critical at this time
The Fed Chair has been consistent with his call for fiscal policy.  Of course Pres. Trump has been a critic of Powell in the past for not providing enough monetary policy.  The recent comments from the White House center around a $1 trillion+ additional stimulus package.  However, there has been some pushback from some fiscally conservative Republicans. Of course it is an election year, however, and the Pres/Republicans are at risk of losing the presidential election and control of the Senate. With risk of a more modest, prolonged bounce with the lower paid workers paying the greatest price, the chance for more stimulus is likely if they have hopes to win the election.  

  • Encouraging banks to lend to the Main St. lending programs
  • Fed is a learning by doing and will keep taking feedback
  • evidence is mixed on negative rates
  • repeats that Fed not decided to adapt yield curve control
  • nothing like tight labor market for low income communities (the opposite is true too).
  • The Fed will move away from ETF's to bonbons over time
  • buying cash bonds will the primary way the Fed supports market function
  • markets working pretty well so buying will be at low end
  • Fed intends to hold to maturity, doesn't rule out sales 
  • delays recovery if state, local government layoffs continue
  • if people lose unemployment benefits, the strain it causes will curb spending in the economy
  • the more we do now, the stronger the economy will be
  • This not the time to worry too much about fiscal situation

For bank trade ideas, check out eFX Plus
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose