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WASHINGTON — Federal Reserve Chair Jerome Powell said Tuesday that the Fed’s lending programs for medium-sized businesses and state and local governments would begin operating by the end of this month.
Powell said that while the Fed has received a “good deal of interest” in those programs, if not enough companies or state and local governments seek to borrow, the Fed would consider changes to them. That could include expanding their eligibility.
His comments came before the Senate Banking, Housing and Urban Affairs Committee, which held an oversight hearing on the $2 trillion federal relief package approved in late March. Treasury Secretary Steven Mnuchin is also testifying about the Treasury’s role in the government’s emergency relief programs.
The Fed’s Main Street Lending program, announced in March, will extend up to $600 billion in loans to companies with up to 15,000 employees. The Treasury has provided $75 billion to offset any losses from the loans, drawn from $454 billion that Congress provided the Treasury to support Fed loans in the relief package.
Mnuchin said his department would accept losses from any Fed loans that would come out of that $454 billion. Mnuchin had previously said that the administration expected to recover all those funds. That observation had raised concerns that the Fed would adopt a cautious approach that would provide less financial support.
Under sharp questioning, Mnuchin also defended the administration’s support for reopening the economy in many states, which he said would be done safely.
Sen. Sherrod Brown, a Democrat from Ohio, charged that the Trump administration was risking the lives of poorer workers in its efforts to boost the economy and financial markets.