Powell, Mnuchin set to testify on CARES act progress

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin are set to testify before the Senate Banking Committee today. Yahoo Finance's Brian Sozzi, Alexis Christoforous, and Brian Cheung discuss what to expect.

Video Transcript

ALEXIS CHRISTOFOROUS: All right, in less than an hour from now, Fed Chair Jerome Powell and Treasury Secretary Steve Mnuchin are set to testify before the Senate Banking Committee.

Our Fed correspondent Brian Cheung is with us now. And, Brian, I know this is supposed to be about the CARES Act and crisis lending, but I'd imagine it's going to dig a lot deeper than that, right?

BRIAN CHEUNG: Absolutely. Well, these are the two biggest power players when it comes to the US government efforts to try to save the US economy, that being Treasury Secretary Steven Mnuchin in addition to Fed Chairman Jerome Powell.

Now, Jerome Powell didn't release his prepared remarks, which he will release or will read off when the hearing does take off in about an hour, as you mentioned. He did say that on interest rates, the Federal Reserve does expect to maintain interest rates at near zero until the Federal Reserve is confident that the central bank can get the US economy back on its feet. And then secondly, Powell really emphasizing in his opening remarks that the central bank wants to prioritize transparency as it works through its nine liquidity programs, a lot of which is using that money that was appropriated from the CARES Act for the US Treasury and for the Federal Reserve on liquidity programs.

So those things will be in focus, specifically the Main Street lending facility. That is going to be something that will likely catch a lot of attention as lawmakers say hey, the Federal Reserve still has yet to actually get that thing started, even though it's been over a month since the Federal Reserve announced that it would be offering low, cheap-cost loans directly to medium and small businesses. Has yet to get that live-- that in addition to the fact that the types of companies that the Federal Reserve will lend to are still a little bit up in the air. You had Senate Banking Committee ranking member Sherrod Brown actually saying in a letter to Chairman Powell that he would actually like the Federal Reserve to make sure that they don't lend to highly leveraged companies that were already facing issues before the COVID-19 crisis.

So a lot of attention will be on the winners and losers out of that Main Street lending program. Keep in mind this hearing will kick off at 10:00 AM, and we'll have that right here on Yahoo Finance.

ALEXIS CHRISTOFOROUS: Exactly. So be sure to keep it right here because at the top of the hour we're going to go live to that testimony on Capitol Hill. Brian Cheung, thanks for a preview.