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? - 28 June 2024
Wells Fargo Economics & Financial Report / Jul 04, 2024
According to the Federal Reserve\'s preferred gauge, core inflation cooled to its softest pace in more than three years in May against a backdrop of measured consumer spending and still-strong personal income.
2021 Annual Economic Outlook
Wells Fargo Economics & Financial Report / Dec 16, 2020
The longest U.S. economic expansion since the end of the Second World War came to an abrupt end earlier this year as the COVID pandemic essentially shut down the economy.
This Week's State Of The Economy - What Is Ahead? - 07 October 2020
Wells Fargo Economics & Financial Report / Oct 10, 2020
In the immediate fallout after the lockdowns in the early stages of this pandemic, there was a lot of discussion about the shape of the recovery.
This Week's State Of The Economy - What Is Ahead? - 16 February 2024
Wells Fargo Economics & Financial Report / Feb 20, 2024
The out-of-consensus start to the year for economic data continued with a slip in retail sales and industrial production followed by a startling 14.8% drop in housing starts during January.
This Week's State Of The Economy - What Is Ahead? - 03 May 2024
Wells Fargo Economics & Financial Report / May 10, 2024
The Federal Reserve can afford patience thanks to a resilient labor market. During April, total nonfarm payrolls rose by 175,000 net jobs, continuing a string of solid monthly payroll additions.
This Week's State Of The Economy - What Is Ahead? - 04 August 2023
Wells Fargo Economics & Financial Report / Aug 09, 2023
Employment growth was broad-based, though reliant on a 87K gain in health care & social assistance. Modest gains from construction, financial activities and hospitality also contributed to private sector job growth.
This Week's State Of The Economy - What Is Ahead? - 20 March 2020
Wells Fargo Economics & Financial Report / Mar 21, 2020
Daily life came to a screeching halt this week as governments, businesses and consumers took drastic steps to halt the COVID-19 pandemic.
This Week's State Of The Economy - What Is Ahead? - 24 January 2020
Wells Fargo Economics & Financial Report / Jan 25, 2020
Fears of an escalating coronavirus outbreak reached the United States this week, as a Washington state man became the first confirmed domestic case and the international total reached more than 800.
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? - 15 January 2021
Wells Fargo Economics & Financial Report / Jan 18, 2021
Retail sales fell 0.7% in December, the third straight monthly decline. Sales are still up 2.9% over the year, however.
