Listening to Fed of Boston President Eric Rosengren speak, it is like watching the Bruce Willis flick “Armageddon.”
(Bloomberg) — Federal Reserve Bank of Boston President Eric Rosengren expects a weak economic rebound from coronavirus-related shutdowns and said more than 200 lenders had begun registration for the Main Street Lending Program.
“More support is likely to be needed from both monetary and fiscal policy,” Rosengren said in the text of a speech he’s scheduled to deliver online Friday to the Greater Providence Chamber of Commerce. He sees unemployment remaining above 10% through the end of this year, with inflation persisting “well below” the Fed’s 2% target.
“Unemployment remains very high, and because of the continued community spread of the disease and the acceleration of new cases in many states, I expect the economic rebound in the second half of the year to be less than was hoped for at the outset of the pandemic,” he said
No Eric, its is the government shutdown of state and local economies that caused high unemployment and fear mongering from NIH’s Anthony
He said more than 200 financial institutions of various size from across the country had begun registering to participate, and that interest from businesses was “tremendous.”
The program, in which banks will make loans of $250,000 to $300 million and then sell a 95% stake in each loan to the Fed, has been slow to start since its March announcement and has been modified several times. The Fed received thousands of comment letters in response to the initial announcement of the program, and some critics argue the terms and complexity of the program may still not be favorable to borrowers or lenders.
Yes, it is a trade-off between viral infections and the economy. The question is how many jobs will come back when local economies return from the seemingly never-ending corona virus epidemic? And how much stimulus will be required?