The US Federal Reserve expects to hand out within days the first of its "Main Street" loans to US companies distressed by the coronavirus (COVID-19) pandemic, Chairman Jay Powell said on Friday
WASHINGTON (Pakistan Point News / Sputnik - 29th May, 2020) The US Federal Reserve expects to hand out within days the first of its "Main Street" loans to US companies distressed by the coronavirus (COVID-19) pandemic, Chairman Jay Powell said on Friday.
"The credit needs of different kinds of companies in different industries are extraordinarily diverse and some of them borrow against assets, some against cash flow, and some are much more volatile than others," Powell told a live-streamed event hosted by Princeton University. "So, it's quite diverse and we're trying to figure out the right credit products for that market. Nonetheless, we're days away from making our first loans on Main Street."
Under the Fed's Main Street program, the minimum borrowing a company can do is $500,000, while the maximum will be $25 million.
COVID-19 has prompted the Fed and Treasury to unleash the largest fiscal response in US history to an emergency, approving and disbursing trillions of Dollars in loans, grants and outright aid to both businesses and individuals to shield them from the country's worst economic downturn.
US Gross Domestic Product shrank 5 percent in the first three months of 2020 for the sharpest economic decline since the Great Recession of 2008/09. Despite all 50 states in America having reopened most of their economy from lockdowns, economists still warn of sharp recession by the second quarter, with 41 million Americans rendered jobless by the pandemic.
