Fed Chairman Powell Did Not Oppose Stimulus Package Provisions On Emergency Lending

Brian Cheung of Yahoo Finance and the Yahoo Finance Live panel discuss the stance of the stimulus package and Senator Toomey’s comments that Fed Chairman Powell did not oppose the stimulus package provisions on lending to emergency.

Video transcript

BRIAN CHEUNG: I’m still waiting for developments in Washington to get this second round of stimulus, this $ 900 billion package. The latest is that the earliest we will see a vote tonight is with no legislation still in the flesh. So we overcame a few hurdles over the weekend.

There have been some disagreements over the Federal Reserve’s emergency lending facilities. We will talk about this later. But the headline is that the package as proposed would include stimulus checks, unemployment insurance, a few other neat things like tax breaks for business meals. But I want to throw it at Shawn. I mean, what caught your eye about the packaging as offered so far?

Well, Brian, this is interesting. First of all, I want to note the market reaction. There is a lot going on today. I think the dominant title is obviously the last when it comes to COVID in the new strain.

But the fact that investors are more excited that we finally got a package, I think, is certainly worth noting. As to what will follow, there are a lot of questions here because, as you said, we are still waiting for the text of the bill. And from there, lawmakers must vote on it.

We therefore envision a fairly long day for the House and for the Senate. And we are still waiting for this text. Once we have that, we will have a little more guidance on when to vote.

But a couple of things — and you mentioned some of the ones that caught my attention in this bill — the $ 600 stimulus checks. It was, of course, something President Trump had pushed, something Democrats had really pushed in the past. So the fact that we’re getting stimulus checks here, direct payments of $ 600.

It should certainly be noted that unemployment benefits have increased, an additional $ 300 per week, $ 325 billion for small businesses and $ 15 billion for airlines. I think it was something that people wondered whether or not would be included in the bill. So definitely not in the right direction.

We’ve heard Democrats swear this is just the beginning. Senator Chuck Schumer said it was a step in the right direction, but more is needed to help the economy move forward. That, of course, could be one of the reasons the market and investors aren’t more excited about this $ 900 billion deal.

But, Brian, another point in the bill that you’re looking specifically at was one of those sticking points over the weekend. And it boiled down to Senator Toomey here and his pressure, really, to stop the Fed from relaunching the loan programs that were put in place under the CARES Act. And we finally got some resolution there.

BRIAN CHEUNG: Yes. Well, I was in the middle of “The Queen’s Gambit” on a Sunday morning when I finally got a call saying there were updates on Capitol Hill regarding this provision you mentioned. Again, Senator Pat Toomey, a Republican from Pennsylvania, trying to really hamper the amount, I guess, of loans the Federal Reserve can make during this time of emergency. He argues that there is a lot of mission drift at the Federal Reserve with the unprecedented number of actions it has taken in the midst of this crisis.

And indeed, what he wants to do is add an amendment to this bill which would say, at least for the specific facilities concerning loans to States and local communities, loans to small and medium-sized enterprises, in addition business credit and corporate debt guarantees, that these three facilities could not be reopened in the future without the express permission of Congress, which would mean that in the future – say a Secretary of the Treasury headed by Janet Yellen, for example – they might not be able to reopen those three facility-specific facilities next year if things go wrong. A very important development because, again, we are seeing this number of cases increasing nationwide, in addition to international headlines with this new strain in the UK. So a lot of concern certainly there.

But again, a lot to watch out for. We still do not have the text of the bill, so we do not have details. But something is definitely worth watching as Congress and the Senate try to get this bill passed before Christmas.

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