Testifying before the House Financial Services Committee today, Treasury Secretary Janet Yellen highlighted recent changes to the Small Business Administration’s Paycheck Protection Program that will allow more small businesses, especially in rural and low income areas, access to the funds. Yellen noted that earlier rounds of PPP funding “often didn’t reach the smallest sole proprietorships. We’re addressing that now.”
She added that because of legislation in December, Treasury also has $12 billion to inject into community development financial institutions and minority depository institutions and that “these CDFIs and MDIs can lend that capital out, helping people buy homes and start businesses.”
During the hearing, Federal Reserve Chairman Jerome Powell added that the Fed has extended its PPP lending facility for another quarter to continue to support the PPP.
Regarding concerns of inflation, Powell said that when the economy reopens, there could be bottlenecks from a surge in spending creating upward pressure on prices, but he added that “our best view is that the effect on inflation will neither be particularly large nor persistent.”
When asked about a timeline regarding additional modifications to the supplementary leverage ratio, Powell said the Fed will be putting something out for comment “relatively soon” and that it will be a “very transparent, public process.”