Fed Chair Powell Participates in Virtual Discussion
* Powell says Fed ‘days away’ from Main Street lending
* Negative not ‘appropriate’ for U.S., he says
* A second virus wave would undermine confidence
* Fed works in ‘strictly nonpolitical way’
The massive stimulus known as the CARE Act (and massive Fed stimulus) did not work as hoped. Consumer spending in April declined by 13.6% MoM.
Personal income rose 10.5% MoM as intended, but personal spending did not work as planned.
The Atlanta Fed GDPNow forecast for Q2 US GDP is now below 50% at -51.2%.
And speaking of Powell’s proclamation that negative rates are not appropriate for the US, the Rudebusch (SF Fed) specification of the Taylor Rule says that the Fed Funds target rate should be -13.52%.