Browsed by
Tag: Feds

Congress needs to be ‘aggressive’ with economic assistance to boost recovery, Fed’s Kashkari says

Congress needs to be ‘aggressive’ with economic assistance to boost recovery, Fed’s Kashkari says

Minneapolis Federal Reserve President Neel Kashkari is urging Congress to be “aggressive” with economic assistance in order to boost the United States’ recovery from the coronavirus pandemic.

“I’m seeing, especially on the small business front, I mean, some sectors of the economy are doing fine. If you are a white-collar worker like I am … you’re able to work from home. You’re really not affected by this pandemic,” Kashkari told CBS’ Face the Nation. “But there are many sectors of the economy that are still being devastated. The travel and tourism industries, the frontline service industries, restaurants, and that’s where you’re seeing big job losses and bankruptcies. And this is going to continue to spiral and continue to bleed on.”

Kashkari said that there are roughly 11 million Americans who are still struggling to pay their bills and put food on the table, and that as long as the problem continues for consumers, there will be “spillover effects” on other areas of the economy.

“The reason the economy bounced back as strongly as it did in June and July is because Congress was so aggressive in the spring,” Kashkari added. “We need Congress to continue to be aggressive so that the recovery can be stronger.”

He warned that it took 10 years to rebuild the labor market from the Great Recession and that the country can avoid going through a similar experience now if Congress is more aggressive in its spending in the immediate moment rather than the future.

TRUMP SAYS HE WANTS A LARGER STIMULUS PACKAGE THAN GOP OR DEMS ARE DISCUSSING

While Kashkari acknowledged that the Federal Reserve can use broad-based tools like lowering interest rates and quantitative easing, he stressed that it cannot fix the specific areas

Read the rest
Years of low interest rates made the current economic crisis worse, Fed’s Rosengren says

Years of low interest rates made the current economic crisis worse, Fed’s Rosengren says

  • Boston Fed President Eric Rosengren said years of low interest rates that encouraged risk-taking are making the current economic downturn worse.
  • He specifically cited “low rates persisting for an extended period even after the economy has made progress in the recovery” that can create problems.



Eric S. Rosengren wearing a suit and tie smiling and looking at the camera: The Federal Reserve Bank of Boston's President and CEO Eric S. Rosengren


© Provided by CNBC
The Federal Reserve Bank of Boston’s President and CEO Eric S. Rosengren

Years of low interest rates led to excessive risk taking in commercial real estate and will make the current economic downturn even more severe, Boston Federal Reserve President Eric Rosengren said Thursday.

Loading...

Load Error

The central bank official said he expects a wave of defaults and bankruptcies to hit that will aggravate an unemployment problem that has hit lower-wage workers disproportionately.

Regulatory authorities, he added, should have been able to see conditions building up that would make any unexpected crisis worse.

“Clearly a deadly pandemic was bound to badly impact the economy,” Rosengren said. “However, I am sorry to say that the slow build-up of risk in the low-interest-rate environment that preceded the current recession likely will make the economic recovery from the pandemic more difficult.”

The Fed has been at the center of the coronavirus pandemic crisis response, slashing already-low interest rates and implementing a slew of programs to ensure market functioning and lend money to areas of the economy in need.

In recent days, it has adapted an even more dovish approach to monetary policy, pledging not to raise rates even if inflation runs above the Fed’s preferred 2% target.

Former Goldman Sachs CEO Lloyd Blankfein on monetary policy

UP NEXT

UP NEXT

A loose Fed also often finds itself the target during times of excess, like the financial crisis and the dotcom bubble. Rosengren’s remarks reflected concern about the consequences of the low rates that

Read the rest