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Illinois is the Only State to Borrow Money from the Fed

October 12, 2020

Fed is Lender of Last Resort for Illinois

Wirepoints reports Illinois set to borrow from Fed’s “lender of last resort” facility a second time

Illinois is set to borrow several billion from the Federal Reserve’s Municipal Liquidity Fund (MLF) for a second time if a new U.S. stimulus package and a progressive tax hike scheme for Illinois don’t come through, according to comments from Illinois Gov. J.B. Pritzker.

Illinois already borrowed $1.2 billion from the MLF earlier this year in an attempt to close some of the state’s 2020 budget shortfall.

The borrowing is significant since Illinois is the only state in the country to tap the MLF. The Fed created the MLF in April to be a “lender of last resort,” where cities, states and other government entities can go if they can’t raise money as a result of COVID-19.

Covid Not The Problem

The MLF is for states

Dallas Fed president supports winding down stimulus when coronavirus crisis eases

October 9, 2020

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Fox Business Flash top headlines are here. Check out what’s clicking on FoxBusiness.com.

Dallas Federal Reserve President Robert Kaplan said on Thursday he sees no need to expand the central bank’s asset purchases to bolster the economic recovery and instead signaled support for winding stimulus down when the coronavirus crisis eases.

“I’d be skeptical about the benefits of doing more,” Kaplan told Bloomberg Radio. Long-term interest rates are already low, and trying to push them down further by adding to the $120 billion in bonds the Fed is already purchasing each month would do little to help the real economy.

CORONAVIRUS WILL DICTATE U.S. ECONOMY’S PATH: FED’S WILLIAMS

Kaplan added “the bond-buying needs to curtail, the Fed balance sheet growth needs to curtail,” when the crisis starts to lapse.

“I don’t think it’s healthy for the markets to be addicted, or too reliant, on Fed presence … it engenders fragilities.”

Fed: Economic recovery will slow without more aid from Congress

October 8, 2020

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The meeting minutes underscore how Fed leaders view another stimulus package — one that reaches households, businesses and local governments still on the brink — as essential to a strong and stable recovery.

At the meeting, Fed leaders updated their estimates on unemployment in the coming years to reflect a sense of optimism that people were returning to work faster than expected. But in many cases those projections factored in some measure of more fiscal aid, the prospects of which were thrown into chaos Tuesday after Trump abruptly called off negotiations before then continuing to push for more talks on narrower targeted aid.

“If future fiscal support was significantly smaller or arrived significantly later than they expected, the pace of the recovery could be slower than anticipated,” according to the Fed minutes.

Fed policymakers also warned that, while the Cares Act was crucial for providing benefits to millions of families,

‘We need to step forward’: Fed leaders call for new focus on race in the economy

October 8, 2020

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The comments from the leading Fed officials were the latest evidence of the central bank’s growing attention to persistent inequality in the economy — a gap that appears to be widening during the coronavirus pandemic. Black and Hispanic workers have been hit harder by the economic fallout from the Covid-19 lockdown than white workers.

The Fed itself has faced criticism for inadvertently exacerbating inequality because its emergency policies are designed to backstop financial markets and allow companies to borrow money. That has boosted the stock market, most of whose value is owned by the wealthiest Americans, even as some major companies have continued to lay off workers. Just 1.2 percent of the value of stocks is held by Black families and 0.5 percent by Hispanic families, according to quarterly Fed data.

The central bank officials Wednesday said that now is the time to face uncomfortable questions about race and

Fed policy makers cite risks to US economy if Congress fails to provide more aid

October 7, 2020

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Federal Reserve officials expressed concern at their most recent meeting that the US economic recovery could falter if Congress fails to approve another round of pandemic relief.

Minutes of the meeting showed that officials believe the economy was growing faster than expected. But they based their forecasts on expectations that Democrats and Republicans would resolve their differences and provide more economic aid, including expanded unemployment benefits and help for small businesses.

The minutes said that “most forecasters were assuming that an additional pandemic-related fiscal package would be approved this year, and noted that, absent a new package, growth could decelerate at a faster-than-expected pace in the fourth quarter.”

The prospects for a new package being passed before the Nov. 3 elections, however, have significantly diminished with President Trump’s decision to end negotiations with Democrats. Trump has instead proposed that Democrats approve individual rescue items, such as money for ailing airlines

Fed Study: How We Made The Top 10% Richer Than Ever

October 5, 2020

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Every three years, the Federal Reserve releases a study on consumer finances that is a stockpile of data on everything from household net worth to incomes. The 2019 Fed survey confirms statements I have made previously regarding how the Fed’s monetary interventions made the top 10% more prosperous than ever. They just left the vast majority of Americans behind.

While we will address the statistical data, there is also the anecdotal evidence that supports this thesis. Since 2008, there have been rising calls for socialistic policies such as universal basic incomes, increased social welfare, and even a two-time candidate for President who was an admitted socialist. Such things would not occur if “prosperity” was flourishing within the economy.

Fed Or Growth

“The disparity between the Fed’s interventions, the stock market, and the real economy has become abundantly clear. For 90% of Americans, there has not been, nor will there

Fed extends limits to stock buybacks and dividends for biggest banks through 2020

October 1, 2020

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A person walks by the Federal Reserve on Saturday, April 25, 2020.
Caroline Brehman/CQ-Roll Call/Getty Images

The Federal Reserve extended its limits on stock buybacks and dividends for the nation’s largest banks through the rest of 2020.
Firms with more than $100 billion in total assets will be kept from initiating new repurchase programs and must keep dividends below their second-quarter levels, the central bank announced on Wednesday.
The extension was made “due to continued economic uncertainty” and is meant to buttress banks’ cash reserves during the virus-induced slump.
The constraints were first announced in June.
Visit the Business Insider homepage for more stories.

The Federal Reserve lengthened its caps on share buybacks and dividend payments for the US’s largest banks through the rest of the year.

Firms with more than $100 billion in total assets will be kept from starting new repurchase programs, and dividend payments will be

The Fed Has Given Big Business A Huge Advantage

October 1, 2020

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And It’s Gone!

The last few months have been painful for small businesses across America. These businesses often have a difficult time getting a bank loan. Bubbling up to the surface is the recognition that the Fed has played a major role in pushing inequality higher. This was highlighted when Federal Reserve chairman Jerome Powell admitted it’s tough for the Fed to boost lending to smaller businesses. “Trying to underwrite the credit of hundreds of thousands of very small businesses would be very difficult,” Powell said. He acknowledged that many of these small loans are really nothing more than the personal promises of people struggling to keep the doors of their business open.

As the financial pain from the pandemic and government restrictions placed on businesses continue, much of the money thrown out to ease our pain has rapidly flowed into the hands of Wall Street and big business. The

Coronavirus forces Fed to extend ban on bank stock buybacks, dividends

September 30, 2020

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The Federal Reserve expects to hold interest rates near zero through 2023 to bolster U.S. economy. FOX Business’ Edward Lawrence with more.

Big banks such as JPMorgan and Wells Fargo will have their hands tied for the rest of the year when it comes to buybacks and dividend hikes as the coronavirus remains a headwind for the economy.

Ticker	Security	Last	Change	Change %
JPM	JP MORGAN CHASE & CO.	96.27	+0.92	+0.96%
WFC	WELLS FARGO & COMPANY	23.51	+0.25	+1.07%
XLF	FINANCIAL SELECT SECTOR SPDR ETF	24.07	+0.32	+1.35%

The Federal Reserve is extending its ban on both citing the pandemic, policymakers disclosed late Wednesday.

FED TO KEEP RATES NEAR ZERO THROUGH 2023 TO ASSIST ECONOMY

In recent months, Chairman Jay Powell has spoken frequently about the uncertainty COVID-19 has placed on the U.S. economy and the need for further stimulus.

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The

Banks Blame Tight Terms for Fed Main St Program’s Slow Start

September 29, 2020

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Banks that had declined to take part in the program mentioned “their ability to provide credit to eligible borrowers without the MSLP, as well as unattractive key MSLP loan terms for lenders as reasons for not registering,” the report said.

The results revealed a wide gap between how banks view the Main Street program and how key Fed officials see it.

Eric Rosengren, president of the Boston Fed, which administers the program, said in a Sept. 23 speech that the terms “should be attractive to banks, both because of the fees collected” and because the Fed buys out 95% of every loan.

He then pointed a finger at larger institutions for not participating. “None of the nation’s largest banks, by this metric, are currently active in the program,” he said.

The Main Street program has come in for criticism and scrutiny from lawmakers for so far lending out only about

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