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Speech
Official Monetary and Financial Institutions Forum Fed Week Financial Stability Session
Short-term credit markets have been disrupted in the past two recessions, and significant risks remain. For example, prime money market mutual funds and stablecoins bear attention. Substantial emergency actions were necessary to support lending during the pandemic, and the economy would benefit from being less dependent on ad hoc measures in crises. A properly implemented Countercyclical Capital Buffer, or CCyB, would help avoid some of these issues. Unfortunately, emergency facilities do well supporting large firms but are challenged somewhat to reach small firms. Without better facilities ...
Speech
The Economy’s Outlook, Challenges, and Way Forward
Recent economic data have been encouraging, but President Rosengren believes the most difficult part of the recovery is still ahead of us. A full recovery probably requires the availability of vaccines and more effective treatments for the virus because until then, many businesses and households are unlikely to return to more normal spending habits. While he anticipates a slowly improving economy, economic activity still faces serious headwinds. Potential financial impediments and challenges in the labor market make the recovery process more gradual than any of us would prefer. Improvement in ...
Speech
The Economy’s Outlook, Challenges, and Way Forward
President Rosengren’s comments were delivered at the Massachusetts Bankers Association’s New England Conference, and were based on a speech he delivered on September 23, 2020 to the Boston Economic Club.
Speech
Implementing the Fed’s Facilities: Moving at Maximum Speed with Maximum Care
Remarks before the Money Marketeers of New York University (delivered via audio webinar).
Speech
The COVID-19 Pandemic, the Economic Outlook, and the Main Street Lending Program
Unfortunately, the economic outlook is being driven by the course of the pandemic, and much depends on how successfully it can be contained, either through public health or medical innovations. The forecast for the U.S. economy this fall is quite uncertain, but President Rosengren's view is that the recent slowdown in economic activity that we have seen in high frequency data is likely to continue. Currently, we have an unemployment rate above 10 percent, and because of the continued community spread of the virus, he is concerned that the pandemic will limit the ability of the economy to ...
Speech
The Economic Outlook – Optimism Despite the Challenges Ahead
We enter 2021 with some optimism. The pandemic is likely to continue to be a problem for public health and the economy until widespread vaccinations take hold. Nonetheless, with substantial fiscal and monetary support, I expect a robust recovery starting in the second half of this year. I also expect that short-term interest rates near zero will be appropriate throughout this year, and that the Federal Reserve will continue to purchase long-term assets until the economy is on a stronger economic footing.
Discussion Paper
Up on Main Street
The Main Street Lending Program was the last of the facilities launched by the Fed and Treasury to support the flow of credit during the COVID-19 pandemic. The others primarily targeted Wall Street borrowers; Main Street was for smaller firms that rely more on banks for credit. It was a complicated program that worked by purchasing loans and sharing risk with lenders. Despite its delayed launch, Main Street purchased more debt than any other facility and was accelerating when it closed in January 2021. This post first locates Main Street in the constellation of COVID-19 credit programs, then ...
Speech
Panel Remarks: The Fed and Main Street during the Coronavirus Pandemic
Panel Remarks at The Fed and Main Street during the Coronavirus Pandemic, WebEx event, April 23, 2020.
Speech
The Main Street Lending Program and Other Federal Reserve Actions
The economy has suffered a truly severe shock from the COVID-19 public health crisis. The unemployment rate has risen very significantly in response to necessary shutdowns intending to limit the health impact of the pandemic. However, even when businesses are free to open, many may face diminished demand until customers once again feel secure leaving their homes, which underlines that public health is at the root of this crisis and its solutions.
Speech
Prepared Testimony for the Congressional Oversight Commission
President Rosengren spoke about the operationalization of the Federal Reserve’s Main Street Lending Program, a facility authorized by the Board of Governors of the Federal Reserve System under section 13(3) of the Federal Reserve Act, with approval of the Secretary of the Treasury. The Department of the Treasury committed to make an equity investment of $75 billion in the Program – and the funds available for investment by the Treasury were appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). ...