• By The Financial District

FED’S POWELL SIGNALS EMERGENCY CREDIT PROGRAMS MUST BE EXTENDED

Federal Reserve Chair Jerome Powell said it was not time to shut down emergency programs aimed at battling the economic fallout from the coronavirus pandemic, with cases again surging and the economy left with “a long way to go” to recover.

“I don’t think it is time yet, or very soon,” to shutter the suite of credit programs set up by the Fed last spring with the authorization of the Treasury Department and funding from Congress, Powell said in the clearest indication yet he feels the programs are likely needed beyond Dec. 31, when many are due to expire, Howard Schneider and Ann Saphir reported for Reuters.


Extending the programs would require Treasury’s approval under the “lame-duck” Trump administration. Some Republicans in Congress have balked at keeping them open, particularly the program of lending for local governments. But Powell and other Fed officials are concerned about how competing perceptions of where the economy stands may bog down debate over the proper policy response.


Even as recent positive news on experimental coronavirus vaccines has raised the prospect of a fuller economic recovery next year, the next few months could be “challenging” the Fed chief said at a virtual event hosted by the Bay Area Council in California.