Courtesy of Pam Martens
Jerome Powell, Chairman of the Federal Reserve
Yesterday the House Select Subcommittee on the Coronavirus Crisis convened a hearing at 2 p.m. to receive testimony from Federal Reserve Chairman Jerome Powell. The title of the hearing was “Lessons Learned: The Federal Reserve’s Response to the Coronavirus Pandemic.”
During Powell’s opening statement, he said this:
“Our emergency lending tools require the approval of the Treasury and are available only in unusual and exigent circumstances, such as those brought on by the crisis. Many of these programs were supported by funding from the CARES Act. Those facilities provided essential support through a very difficult year and are now closed.”
It’s factually incorrect for the Fed Chairman to say that it can only make emergency loans with the approval of the Treasury. Months before there was any case of COVID-19 anywhere in the world the Fed was making hundreds of billions of dollars a week in emergency repo loans to Wall Street trading houses. The emergency loans started on September 17, 2019 – four months before the first reported case of COVID-19 in the United States. By January 27, 2020 the Fed’s ongoing cumulative loans to bail out Wall Street’s hubris tallied up to an astounding $6.6 trillion. (See Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That’s 34% of Its Feeding Tube During Epic Financial Crash.)
The Fed made these loans without any Congressional approval or oversight. Despite Powell’s promises to the Senate Banking Committee that the Fed would provide a full report on what caused the need for these emergency bailouts to Wall Street banks, the public has yet to see any such report from the Fed.
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