The Treasury Secretary and the head of the Federal Reserve speak at a hearing before the Senate Committee on banks.
Treasury Secretary Steven Mnuchin and fed chief Jerome Powell are testifying before the Senate Banking Committee on Tuesday at a hearing on economic measures the government has taken in response to the coronavirus pandemic.
Senators are asking Mnuchin and Powell about what other measures need to be taken to support the economy and what mistakes were made in allocating previously approved anti-crisis packages totaling about $ 3 trillion.
According to Steven Mnuchin, according to an optimistic scenario, markets will open, and new lending mechanisms will not be needed.
In response to questions about technical failures that caused delays in payments on loans for small businesses, as well as abrupt changes in the rules that caused many large restaurant chains with access to capital markets to return funds under the threat of an audit, Mnuchin stressed that government departments are working together to solve these problems.
As more States resume economic activity, the government is nearing the end of an eight-week program to inject funds into small businesses aimed at preventing layoffs. There are calls to extend the program. President Trump, on Monday, said that doing so “should be easy.
Other programs designed to help large businesses and municipal bond issuers are just beginning.
In a pre-prepared statement, Powell specifically noted that the cares act played a “key” role in ensuring the fed’s ability to expand lending programs to offset the economic impact of the pandemic.
Mnuchin, in his statement, forecasts a high unemployment rate in the second quarter but notes that the overall situation should improve as economic activity resumes.
“In close cooperation with the governors, we are beginning to open up the economy in a way that minimizes risks for workers and consumers,” Mnuchin says. – We expect economic conditions to improve in the third and fourth quarters.”
It is also expected that senators will ask Mnuchin and Powell to comment on another $ 3 trillion anti-crisis packages prepared by Democrats in the House of Representatives and received its approval on Friday. Republicans in the Senate do not support this initiative, and negotiations between the parties and the administration are continuing.
Before the hearing, Mnuchin was scheduled to meet with Vice President Mike Pence, Senate majority leader Mitch McConnell and House Republican leader Kevin McCarthy, according to the White house.