On Tuesday, the Senate Committee on Banking, Housing and Urban Affairs will conduct a hearing entitled “Oversight of Housing Regulators.” The witnesses will be: The Honorable Benjamin S. Carson, M.D., Secretary, U.S. Department of Housing and Urban Development; and The Honorable Mark A. Calabria, Ph.D., Director, Federal Housing Finance Agency.
Earlier this month, Treasury Secretary Steven T. Mnuchin and Jerome H. Powell, Chairman, Board of Governors of the Federal Reserve System testified before the Committee on the current state of the CARES Act.
"We have worked closely with the Small Business Administration on the Paycheck Protection Program (PPP) to ensure the processing of more than 4.2 million loans for over $530 billion to keep tens of millions of hardworking Americans on the payroll," Mnuchin said in his testimony. "We are proud that nearly 400 Community Development Financial Institutions and Minority Depository Institutions, and many more small and non-bank lenders, are participating in this program."
In Powell's testimony, he discussed how the Federal Open Market Committee undertook purchases of Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning.
"While the primary purpose of these open market operations is to preserve smooth market functioning and effective policy transmission, the purchases will also foster more accommodative financial conditions," Powell said.
As Powell notes, unlike in 2008, banks entered the current crisis with sufficient liquidity. As a result, they have been well positioned to cushion the financial shocks we are seeing. In contrast to the 2008 crisis when banks pulled back from lending and amplified the economic shock, in this instance they have greatly expanded loans to customers.
Additionally, according to Powell, the Federal Reserve is preparing to launch the Main Street Lending Program, which is designed to provide loans to small and medium-sized businesses that were in good financial standing before the pandemic.
Here's what else is happening in The Week Ahead:
FOMC Meeting (Tuesday)
NAR Housing Affordability Index (Friday)