Small and medium-sized banks could face stress from defaults on loans to small business and commercial real estate if consumers continue to avoid traveling and shopping, the Federal Open Market Committee said today.
As the coronavirus pandemic continues to cause tremendous human and economic hardship across the country the Federal Reserve will aim to achieve inflation “moderately above 2% for some time” the Federal Open Market Committee said today.
Certain segments of the economy were beginning to show improvement in recent days, but the trajectory of the economy overall will continue to depend on the course of the coronavirus, according to minutes from the most recent Federal Open Market Committee meeting released today.
As expected, the Federal Reserve announced today that it would hold the target range for the federal funds rate at 0 to 0.25% as the U.S. continues to weather the economic challenges of the coronavirus pandemic.
The OCC issued a long-awaited final rule today affirming that permissible interest on a loan made by a national bank or federal thrift remains valid when the loan is transferred or sold, codifying the “valid when made” principle for nationally chartered banks.
Members of the Federal Reserve Open Market Committee said they expect economic activity in the second quarter to “decline at an unprecedented rate” as the coronavirus pandemic persists in the U.S., with the heaviest burden likely to fall on the “most vulnerable and financially constrained households in the economy.”
The near-term U.S. economic outlook “deteriorated sharply” and became “profoundly uncertain,” prompting the Federal Open Market Committee to drop interest rates to near zero over the course of two unscheduled policy actions in early and mid-March
Acknowledging the “evolving risks” that the coronavirus outbreak poses to the U.S. economy, the Federal Open Market Committee unanimously voted to cut the target range for the federal funds rate by 50 basis points to a range of 1% to 1.25%.
The American Bankers Association today warned lawmakers of the potential consequences of imposing interest rate caps on consumer credit products.
As expected by economists, the Federal Open Market Committee today voted unanimously to hold the target range for the federal funds rate steady at 1.5% to 1.75%.