Yahoo Finance's Brian Cheung joins Kristin Myers to break down the latetst remarkes from Fed Chair Jerome Powell and Treasury Sec Steven Mnuchin as they testify before a congressional pannel on pandemic lending.
KRISTIN MYERS: I want to start with the economic recovery during this pandemic and go over now to Yahoo Finance's Brian Cheung. Today, Treasury Secretary Mnuchin and Fed Chair Jay Powell were on the Hill testifying in front of the Senate Banking Committee about the economic impact of the pandemic and more. So Brian, give us all the details from today.
BRIAN CHEUNG: Well, as you mentioned, we did hear from the two major economic policymakers, that being Treasury Secretary Steven Mnuchin in addition to Fed Chairman Jay Powell in the Senate Banking Committee earlier this morning. Jay Powell saying that the-- they can acknowledge both the progress that the economy has made so far, but then also note how much farther we have to go with millions still out of work. But he did say that the lion's share of the recovery so far, the credit does go to fiscal policy and the CARES Act that was passed back in March.
And they were asked actually to comment on that $908 billion proposed package, as you mentioned, Kristin, that was breaking during the middle of the hearing. And Chairman Powell, after being ratted off the topics that are going to be touched on in that potential package, did say that he thought it was something that was a good starting point. Here's what he told the Senate Banking Committee this morning.
JAY POWELL: It sounds like you're hitting a lot of the areas that could definitely benefit from help and some of the areas that are-- these are areas that are going to be experiencing a challenging winter.
BRIAN CHEUNG: So a challenging winter. But he did say that it's a good start. Again, he said he still needs to look at the details of the package, even the Treasury Secretary said he was still working through some of those details himself. Now, on the other side of that discussion in that morning hearing was actually the dispute between the Treasury and the Fed over the use of the CARES Act money for those emergency liquidity facilities.
You recall that two weeks ago there was disagreement between both parties over whether or not they should have let some of those market backstops and help to small businesses in addition to state and local governments expire on December 31, as originally planned. Now, of course, the Federal Reserve has agreed to return the money to the Treasury. But we do know, in addition, that the Federal Reserve has said that they would like to keep some of those open, although the Treasury ultimately had the last word.
So Congress telling both the Fed and the Treasury today that they would need to return to Congress to reopen them. But of course, with a new Treasury Secretary and a new administration coming in, there could be some legal challenges over the legal interpretation of that money. Kristin.
KRISTIN MYERS: Brian, I want to follow here with you and just ask you about the economic outlook, at least as Fed Chair Powell is seeing it. I know you mentioned that there is a little bit of disagreement between the Treasury and the Fed. But how does Jay Powell perceive the economic outlook?
BRIAN CHEUNG: Well, I think Jay Powell was being very clear in saying that the economy has recovered faster than economic forecasters had originally thought. And he said that that was likely due to the excellent shape that the economy was in before it sustained this macroeconomic shock that we haven't seen in about 100 years. And when we talk about what do we have to go from here, though, he cautioned that it's going to be a long recovery.
It's going to be a cold winter, as he mentioned, that's going to be very challenging specifically for businesses and restaurants in particular, which have not been able to accommodate some money coming in with the closures, especially with the spike in cases. Now, on the vaccine front, he did say in his prepared remarks that he does see it as a positive development, but said, there are still questions remaining about the efficacy of those vaccines in addition to the logistics of getting those out on a widespread basis to the Americans that really need it right now. So I think that's something where the Fed chairman has said, yes, it's definitely a positive thing, but we all need to be careful in the meantime as we are many months and even quarters away from full vaccination of the American population.
KRISTIN MYERS: All right. Yahoo Finance's Brian Cheung, thank you for giving us all of those details.