The statement comes after multiple small and midsize institutions earlier this year warned the agencies that the secured overnight financing rate was ill-suited to them.
Asked about the political uncertainty surrounding the undecided presidential race, Federal Reserve Chair Jerome Powell said the central bank isn’t wavering from its duty “to support the economy during this difficult time.”
Other central banks have considered phasing out cash as they explore digital currencies. Should the idea take hold in the U.S., Federal Reserve Chairman Jerome Powell said it would not replace the physical dollar.
Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.
The Financial Stability Oversight Council said the mortgage giants may need a bigger capital cushion than their regulator has proposed, but stopped short of designating them as “systemically important financial institutions.”
During a Senate Banking Committee hearing, the Massachusetts Democrat asked Powell what the Fed is doing to reduce inequality along economic lines in the U.S.
Capping a series of appearances on Capitol Hill this week, the Federal Reserve chair and Treasury secretary emphasized that they don’t have the authority to reallocate CARES Act funds to assist small businesses on their own.
Commercial real estate companies are among those left out of the Federal Reserve’s middle-market relief program, but House members said they need government-backed financing to navigate the pandemic as much as anyone.
