Fed's Rosengren sees Main Street loans within next two weeks

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Federal Reserve Bank of Boston President Eric Rosengren said he expects companies to begin receiving money through the central bank's long-awaited Main Street Lending Program within two weeks.

"This is a program that's just starting up, so we're expecting to have the loan documents up this week," Rosengren said Sunday on CBS's "Face the Nation." He added, "We then have to register the banks, and then we're going to be ready to start issuing the loans."

Eric Rosengren, president and chief executive officer of the Federal Reserve Bank of Boston.
Eric Rosengren, president and chief executive officer of the Federal Reserve Bank of Boston.

"Money will go out over the next two weeks," he said.

Lending facilities

The Boston Fed is administering the Main Street program, part of the emergency lending effort announced by the U.S. central bank to keep credit flowing in the economy during the COVID-19 pandemic. It's designed to provide up to $600 billion in credit to small and medium-sized U.S. companies.

Fed Chairman Jerome Powell and Rosengren had said in recent days they expected it to become operational by the end of May. The Fed first announced its intention to create the program on March 23 and has been under increasing scrutiny over its slow launch.

"We've been working on it very hard over the last several months," Rosengren said. "I expect it will be a relatively smooth opening."

Main Street is one of nine Fed emergency lending programs opened or under construction that are aimed at mitigating the economic impact of the virus.

Asked about the pandemic's impact on the labor market, Rosengren said he doesn't expect a rapid rebound in employment this year.

"Unfortunately, I think it's likely to be double-digit unemployment through the end of this year," he said. "Getting back to the low level of unemployment we saw at the end of February probably takes either a vaccine or other innovations that make it much less risky to go out."

Rosengren also repeated his view that more government support for the economy will be necessary.

"We need to continue fiscal and monetary policy, because double-digit unemployment risks actually a much more severe outcome in labor markets over time," he said.

Bloomberg News
Small business lending Eric Rosengren Federal Reserve Bank of Boston Coronavirus