Fed's Bostic: A bit surprised by the Treasury's decision
|In a Bloomberg TV interview, Atlanta Federal Reserve President Raphael Bostic who has said the economy will need more help in the months ahead commented on the recent news surrounding All US emergency programs created by the Cares Act will expire Dec 31
Key comments
Says was a bit surprised by the Treasury's decision.
Says given where economy is, would be prudent to keep emergency facilities open.
Says uncertainty has kept people from engaging in economy.
Says looks like will be well into 2021 until we achieve equilibrium.
Says emergency lending tools have been helpful.
Says presence of facilities gave people confidence, even when they weren't used.
Says as federal relief expires, will leave people at risk.
Risk of economic contraction, but not in his model now.
Expects 2021 to show positive growth and to pick up as year goes on.
When households burn through their savings will signal a tipping point requiring more fed engagement.
Best way forward on recovery is `all hands on deck'.
Market implications
With the US elections now settled, as far as the markets are concerned, the focus is on the economy and how Congress will resolve a fiscal aid package.
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