The Fed Goes Nuclear: Part II
The Federal Reserve announced a series of measures this morning that are intended to assist households, businesses and state & local governments as they cope with the economic fallout of the COVID-19 outbreak. The Fed estimates that the programs will provide an additional $2.3 trillion worth of financial support. The Federal Reserve provided details today of a new program it foreshadowed when it announced a series of measures on March 23, which we discussed in a report we wrote that day. The Fed also expanded some of the programs that it put in place on March 23. We welcome these measures because they should provide further liquidity support to capital markets and help businesses that may be struggling to stay afloat while many parts of the economy remain on lock down.
The most important new measure is the Main Street Lending Program, which the Fed noted on March 23 would be forthcoming. The program will make four-year loans to businesses that have up to 10,000 employees or revenues of less than $2.5 billion. The businesses must have been “in good financial standing” before the crisis, and they must commit to make “reasonable efforts” to maintain payrolls and retain workers. Businesses will receive loans from commercial banks, which will retain a 5% stake and sell the remaining 95% to the Main Street Lending facility, which will purchase up to $600 billion in loans. The idea behind the Fed buying 95% of the loans is so that banks can keep as much room as possible on their balance sheets for additional lending. The Fed will defer principal and interest payments for one year. The facility is being capitalized by a $75 billion equity position that is provided by the U.S. Treasury Department via funding from the CARES Act.
This Week's State Of The Economy - What Is Ahead? - 07 August 2020
Wells Fargo Economics & Financial Report / Aug 11, 2020
There were more signs of global recovery this week and PMI surveys improved further across the world.
This Week's State Of The Economy - What Is Ahead? - 03 September 2021
Wells Fargo Economics & Financial Report / Sep 10, 2021
e move into the Labor Day weekend celebrating the 235K jobs added in August, while simultaneously lamenting that it was about half a million jobs short of expectations.
This Week's State Of The Economy - What Is Ahead? - 16 October 2020
Wells Fargo Economics & Financial Report / Oct 20, 2020
Data continue to reflect an economy digging itself out of the lockdown-induced slump.
This Week's State Of The Economy - What Is Ahead? - 18 December 2020
Wells Fargo Economics & Financial Report / Dec 21, 2020
This week marked the first U.S. COVID vaccinations and the imminent rollout of a second vaccine.
This Week's State Of The Economy - What Is Ahead? - 10 April 2020
Wells Fargo Economics & Financial Report / Apr 11, 2020
The Federal Reserve greatly expanded the collateral that it is willing to buy, further easing pressures in financial markets.
25 January 2021 Economic Outlook Report
Wells Fargo Economics & Financial Report / Jan 30, 2021
In the second installment of our series on economic risks in the foreseeable future, we analyze the potential for higher inflation in coming years stemming from excess demand.
The Regional Breakdown Of A Labor Market In Meltdown
Wells Fargo Economics & Financial Report / May 26, 2020
Employment fell in all 50 states and 43 states saw their unemployment rate rise to a record in April. The damage is already hard to fathom-a 28% unemployment rate in Nevada and still another month of job losses ahead.
This Week's State Of The Economy - What Is Ahead? - 22 May 2020
Wells Fargo Economics & Financial Report / May 25, 2020
The re-opening of the country is getting underway, with all 50 states starting to roll back restrictions.
This Week's State Of The Economy - What Is Ahead? - 29 May 2020
Wells Fargo Economics & Financial Report / May 30, 2020
The beginning of this week saw some optimism that the economic downturn could be relatively short-lived, but data through the rest of the week provided grim reminder of the economic damage from COVID-19.
This Week's State Of The Economy - What Is Ahead? - 23 July 2021
Wells Fargo Economics & Financial Report / Jul 30, 2021
In the biggest financial news this week not connected to college football conference realignment, July\'s NAHB Housing Market Index slipped one point to 80.
