>> we are very close to that decision and i'm going to toss it back to kelly, who has a much better read on exactly the number of seconds until that decision we should point out that the dow is up 550 points, kelly. >> yes, it is. and the nasdaq is up -- it's the outperformer today, up 3.5%. also keeping a close eye on rates near historic low. steve liesman here with the historic fed decision. steve? >> kelly, the federal reserve saying it's leaving rates unchanged at that range of zero to 0.25% and saying it's going to keep rates there until it's confident that the economy has weathered the impact of the coronavirus and is back on track the federal reserve saying in a statement, it is committed to using the full range of tools. and you've seen that in the programs that have been announced. they will continue to purchase treasuries, the fed says, and mortgages in the amount needed, end quote. and will continue to offer

large-scale repos, as it has been doing it goes on to describe the impact of the coronavirus on the economy the way it sees it, causing tremendous human and economic hardship, the statement says and measures to protect health have been causing the sharp economic declines and the losses in unemployment and jobs on the inflation front, the federal reserve notes, muted inflation, says weak demand and lower oil prices are holding down inflation disruptions to economic activity, it says, have impaired the flow of credit the public health crisis will weigh heavily, it says, on economic activity and unemployment and just a bit of analysis picking on something that was just said there, there is no forward-looking aspect to this statement here generally, the federal reserve says, this policy will lead to "x," continued, sustained expansion. things like that there is nothing here where the fed says the policies we have now will lead to "x" in the future it's all about the fed chronicling the damage to the economy from the coronavirus,

explaining that it will use tremendous tools to get back to where the economy was. but not forecasting when that will be or even characterizing how that will be tyler? >> what does that suggest to you, steve that they just don't know? that they don't want stope out on the edge of a long diving board? >> you nailed it, tyler. i think the outlook is as uncertain as it could -- as it can be i think the fed has all of the information that we have provided on an ongoing basis, as to the median estimates of wall street economists with a 35 or 40% downturn what the fed does say, and i would like to read this, because i think it's -- it really speaks to how unusual the time is the ongoing publichealth crisi will weigh heavily on economic activity the committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health so they're watching the spread of the disease, the hospitalization rates, the

infection rates, the news about the drugs. public health now is an absolute key to monetary policy >> all right, steve liesman. i know you'll be hanging in with us for most of this half hour and then through the press conference, but some market reaction, let's bring in bob pisani hello, bob >> looking at the headlines here as steve has presented them. he's right, there's no forward guidance at all. i'll tell you everyone i talked to on the trading desk, a little bit more on the pace of the bond purchases and i, covering etfs, i want to know a lot more about what they're doing they made this announcement. we really don't have any details at all they're going to be buying corporate bonds, corporate etfs, high-yield etfs, as well and a lot of people in the etf business have been very interested for more information. and we really don't have it. hopefully this will come up in the press conference but i have a sneaking suspicion that chairman powell won't

provide a lot of details on the actual numbers frankly, there's a lot of questions here and i'm not sure that we're going to get all of the answers today. the one thing i'm quite sure of is we have a very powerful rally going on in the last couple of days call it a combination of an opening of the economy rally, an expanded testing hopes, as well as today, better treatment you heard meg talking about that i just want to point out how much we're getting an outperformance from the previously lagging sectors here. so here's the s&p 500. the bank sector, the banks are doing great this week. they're outperforming dramatically, up 7, 8 , 9% we're getting small caps outperforming. the russell 2000 hasn't been outperforming in ages. the small cap index. the s&p midcap is up 10% the s&p 500 is only up about 3% overall here so we're really getting a broad rally. today, we have almost 10 to 1 advancing to declining stocks. that means that this is not a f.a.a.n.g. rally, folks. we're really broadening out for

the reasons that i mentioned so, obviously, there's a lot of hope going on right now in terms of testing and advancement in the science. guys, back to you. >> it's a great point, bob and of course, all of this early reaction still waits on the press conference we're going to have around half past hour with chair powell let's check in on the bond market, first see how it's responding to the statement and what its expectations are. rick santelli here for that. rick >> well, if you look at the intra-day charts, look at the dollar index, we've given up a little bit of ground two-year notes, we're at 19. ten-year notes, we were at 61, now 60 basis points. the point is, stocks have done so much to the upside, interest rates have come down and stayed down why are they down? because the fed pretty much has set the table for anybody who needs some extra meals, but they still, as you pointed out, they really haven't bought any etfs they haven't really bought any munis. but those programs and just knowing that table is set seems

to be doing the trick or treat but many want to know, what signals would the fed pay attention to, to maybe either pull back on some of these policies or programs or add more would they be looking at average hourly earnings. what part of the jobs report are they going to look at initial claims going down, because maybe some of the ppp policies are putting people back on the payrolls, like, what are the tells for the fed to move out of the zone of being the backside and this is what investors want to know, suffice it to say, while stocks rally, the fed has put interest rates in permanent ink for very little volatility and i'm not sure that's going to be changing anytime soon >> all right, rick, stick around >> michael schumacher, to pick

it up. we think yields are too low, going up in the near-term up and quite a bit more in the longer term and if you read the fed statement and think about what the fed has been doing over the last month, month and a half, it's trying to buying bonds to make sure liquidity is there it doesn't seem to be trying to depress yields for their own sake, so we think that does set the stage for yields to go up. not astronomically, but our call, for instance, at year end is that the ten-year goes to 1.25 so we think that's in play and it wouldn't require too much of a shift in the fed stance to make that happen >> i'm glad you articulated what going up a lot looks like, because it could double from here and we're still talking about 1.25 does it stick around, mike what kind of recovery, what kind of economy do you think we're going to have as we look out a year or two? >> not very good for a long time, i think is the takeaway. and people can debate between v, l, u, w, who knows but when you have 26 million people out of work, it's hard to

imagine a super-fast recovery. our economics team thinks it's going to be a little more challenging than they thought initially. but even so, considering the backdrop of yields, having rates go up to 1.25%, even a little bit higher, seems like it's very feasible >> mona, what would you add on that when we talk about what the recovery will look like and what the stock market has already priced in. how much does the fed even play a role in that or is it just down to the science? >> yeah, you know, it's interesting. i think it's going to be a very sector-specific story. it's not a beta story and it really hasn't been if you look at year-to-date performance, the s&p has really been driven by two sectors health care and technology those are really sectors that benefit in this post-covid environment. what's really been lagging has been the cyclical value sectors, the energy, financials, parts of industrials that we talked about earlier. if we start to see more hope building around a real recovery, economic reopening, economic stabilization, you may start to see some of those cyclical sectors start to perform better

and we saw a little bit of that just this week but generally speaking, when we look also at the more recession-proof defensive sectors, reits and utilities, they continue to lag, perhaps talking about or seeing that the peak fear of the recession is behind us. you know, we talk about positioning going forward in a post-covid work. we continue to like tech and health care, the stay-at-home or more stay-at-home economy does well, but we would like to balance that with a little bit of the financials and energy, but also a little bit more defensive. we like treasuries and gold still here, as well. >> david kelly, you buying gold? >> i think it's something to think about long-term. i've never said buy gold, but i am -- the thing that i'm most interested in is not so much what the fed does during this, what i think will be a u-shaped recession. we know they're all in and will keep rates low as long as we have an unemployment rate in the teen but if this economy comes roaring back in the second half of 2021, at what point will the

fed say, we can't just accommodate fiscal largess forever. we've got to be somewhat fiscally responsible if the economy is coming back, we've got to move out. and to me that's the really important question if we wait too long, we might end up with inflation, in which case gold, maybe equities. if we move quickly, the bond market may be in some trouble. i do like equities, real estate, even gold in this environment for the long run, just because rates won't stay this low once we've got a full recovery from this terrible recession. >> i was going to ask you about inflation, david and maybe you can elaborate just a little bit we think the really know whether the economy is going to heat up and come back quickly, strongly, a hot economy typically means inflation or can mean inflation. but the one thing you can't dispute is that there's a lot of money that has flooded this system a lot of money chasing goods, chasing services what are the odds we get into an inflation situation down the

road, or do we just not need -- it's not something we need to worry about right now, but maybe down the road? >> i think the odds are higher than we think. i mean, we've been -- we've tested the inflation bomb in the last 11 years and it's never went off i think we'll have even more fiscal expansion, even more monetary expansion this time around and if we get a more rapid decline or a rapid decline in unemployment, enough momentum in the economy, then that could actually put up inflation. and one other thing. i want to see if the next government is a little bit more committed to dealing with inequality, whatever government we have at the end of this, because i think that the secret to keeping inflation low has actually been income inequality. if more money goes to middle and low-income households, in a rebound, you could have demand outstrip supply and that could finally bring inflation back there has to be a limit as to how much money you put into the economy. and i think we'll discover that limit over the next few years. >> all right let's bring steve liesman back into the conversation. steve, jump in

>> i think david is talking about a lesson that the fed learned back in '08 and '09. and one of the hallmarks of that policy was really a push me/pull you kind of policy, where they say, we're wide open now, we're going to be buying treasuries, we're going to be buying mortgages, keeping rates at zero, but we're very, very mindful of inflation, and we're going to take this stuff back as soon as we possibly can. one of the lessons that central bankers learned back then, tyler, was that second part of that statement, the halting aspect of it, made policy less effective. i don't think you're going to hear that from powell today. i don't think you're going to hear that from many central bankers right now. the idea is that we're wide open, we're going to be buying all of this stuff for a very long time. and we're not looking over our shoulder about the potential ghost of inflation tracking us down we'll have to handle that when it comes but we're very long ways away from that.

not only that, tyler they were already thinking about letting the economy run a little hotter above 2%, even before the coronavirus hit. >> and michael schumacher, i'll bring you in on that point, finally. you see the ten-year going to one and a quarter. that doesn't factor in much inflation, i would imagine >> that's right. n maybe a little bit, but not a heck of a lot. at this point, inflation will be a high-class problem so if the fed has to worry about that in six months or 18 months, that's a great thing so i think that the fed will be pretty tolerant of that going forward. >> all right thank you all today. michael schumacher, mona, david kelly, we'll have more coverage throughout the hour as we get ready for fed chair jerome powell to host what will actually be a virtual press conference at 2:30 p.m >> all right, kelly. the other big story of the day, some positive results coming out of a trial of gilead's coronavirus drug, remdesivir it's helping to boost the markets in a big way today and meg terrell has the details.

hi, meg. >> hi, tyler these were the results we were waiting for from a nih study a double-blind of remdesivir, the gold standard. we were not expecting these results for another month, but we got them today from dr. anthony fauci in an oval office briefing in just a little time ago. he told us this in this trial of more than a thousand hospitalized patients, they saw a 31% faster time to recovery for those on the drug, about 15 days taking remdesivir versus about 11 for placebo he also described a suggested survival benefit 8% of those on the drug passed away versus 11.6% of those on placebo. and he called it suggested, because it wasn't yet statistically significant. "the new york times" is reporting that the fda plans to announce as soon as today it's providing emergency use authorization for this drug in the united states, citing a senior administration official and that matches up with what we'd heard from dr. scott gottlieb, who said he expects that authorization immediately based on these results

the fda for its part says it's been engaged in sustained and ongoing discussions with gilead, regarding making remdesivir available to patients as quickly as possible, as appropriate. now, these are obviously very positive results, you guys there are other data coming out today. there was a lancet study of that stopped china trial that don't look as good however, that was stopped due to not being able to enroll enough patients so dr. fauci saying their trial of a thousand patients that was completed is the gold standard and we could see this drug get emergency use authorization today. >> what do we know, meg, if that kind of authorization were to come through so quickly, what do we know about gilead's ability to produce in sufficient quantities and distribute to the patients who could benefit >> that's a really important question, tyler. so the company has said it hopes to be able to supply 140,000 treatment courses by the end of may. based on a ten-day treatment

duration, but they also put out their own study results this morning showing a five-day treatment course did appear similar. so that could double the supply to 280,000 doses now, that's by the end of may. that's a couple of weeks potentially to getting up to that supply. we don't know exactly where it stands with gilead right now and they did say they plan to make that supply available at no cost, guys >> thank you very much, meg. meg terrell. >> and gilead shares up a little more than 6% right now, tyler. thanks coming up, we'll take you to a very different kind of fed news conference but there will be jay powell and reporters asking questions it will be a virtual press conference in about 13 minutes' time but first, new questions about how companies can spend their ppp money and a new bright spot for housing amid some dreary data stay with us for updates on both

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and readable voicemail. and safe, convenient installation. when every connection counts, you can count on us. get the connectivity your business needs. call today. comcast business. welcome back here's a check on your markets we're a little off session highs after the fed decision dow hanging on to a gain of 2.2% that's 530 points.

russell 2005 small caps having an insation session. many small businesses are tapping ppp round two for cash to keep their companies going. but they want more flexibility on how they can use the funds. kate rogers has that story for us kate >> hi, kelly, that's right many small businesses are still in wait-and-see mode over this funding. but as cash is making its way to main street, there are more questions now cropping up from small business owners over when and how they should use this money. advocatesy groups report their members are worried about the time frame for forgiveness, with some pushing for more flexibility. borrowers have eight weeks of receiving their loan disbursement to bring back staff in order to qualify for forgiveness, but businesses fear they may run out of cash as soon as they get if shelter in place orders and mandated closures are extended the fine print still very much a work in progress last hour, the sba sending out a new notice to lenders, essentially saying that it will close etran, which is the application system that banks use to submit these loans to the

sba for an eight-hour window tonight. to all lenders with more than $1 billion in assets, they're basically saying to ensure smaller lenders and their businesses have access to ppp, this, of course, raises questions here about why any of this is necessary at all and remember, this is a first-come, first-serve program. tyler, back over to you. >> thank you very much, kate rogers big drop in pending home sales those are ones that have been assigned, but not closed but there could be a bright spot for housing in all of this and dinah oli dinah olick has t. >> reporter: pending home sales tanked nearly 21% for the month in march not exactly unexpected, but some spots were even worse. the west region dropped 27%, as california and washington state were early to see the coronavirus start and then among the first to lock down the numbers will probably be even worse in april, but we did get a promising sign today from the mortgage market. mortgage applications to

purchase a home jumped 12% for the week and while they were still down 20% annually, that's actually an improvement from last week, when they were down even more annually now, mortgage rates also hit a new record low last week, giving buyers even more incentive, despite the fear in the economy. and just yesterday in its earnings release, dr horton, the nation's largest home builder, reported improved sales in just the past two weeks now, this is by no means a massive rebound. just perhaps a potential bottoming. the realtors today forecast total 2020 sales will be down 14% from a year ago. back to you guys >> so diana, anybody who's closed on a house or done a mortgage knows that you sign your name or you initial -- you put your initials hundreds of times. how the heck can you close on a house when you can't go to the lawyer's office? >> on the hood of your car, tyler. that is how people are doing it right now. they're doing drive-through closings on both refinances and

regular home purchase loans. they're driving up to your driveway, putting the paperwork out, you use your own pen, you get it done there. they are actually done a lot of closings now and making a lot more e-signings and virtual closings in states that allow it but it can be done >> still ahead, we await the live comments on the state of the economy from the fed chair, jay powell he'll tell us what he sees we'll usually show you a live shot of the empty podium as we wait down there in washington at the fed headquarters but this, of course, is a brand-new world and a virtual fed meeting. and as we head to a break before that meeting begins, check out the -- or that press conference begins, check out the markets, up 2% for the dow, even more for the s&p 500. wel see the ten-year note at 0.5.'lbe right back with more. since 1926, nationwide has been on your side.

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all right. let's go over to sue herrera and get the very latest on the coronavirus. hi, sue. >> hello, ty hello, everyone. here's what's happening at this hour president trump holding a meeting with executives to discuss plans for reopening the economy. sources tell cnbc that wynn resorts, toyota, and waffle house are among some of the companies taking part. in brooklyn, new york, last night, police broke up a crowd of thousands lining the streets for the funeral of a local rabbi. a spokesperson for the orthodox jewish community accuses the city of having a double standard for enforcing social distancing. well, today, mayor bill de blasio called the dense gathering, quote, absolutely unacceptable >> this is still a pandemic. people's lives are put in danger when people gather

so what's shocking to me is that after all the warnings, something of this size would happen and that's where i'm making very clear, unapologetically, that the next gathering will be met by summons and arrests, period no more warnings >> as always, you can get more on our coronavirus coverage by heading to cnbc.com. ty, back to you. >> all right, sue, thank you very much! we are just moments away from the fed's first, in my knowledge, i think it is absolutely the first, virtual press conference with the chair, jerome powell. it will be an interesting experience for everyone included and let's get a quick check on the markets right now, as stocks are near their highs of the session, with the dow up more than 500 points right now, 2.3%, the s&p up even more, on hope both from gilead on the coronavirus treatment and optimism about reopening the economy. let's bring in for more conversation right now,

jpmorgan's david kelly david, welcome back. you know, one of the things that i've been thinking about a lot is the amount of debt that is being piled on by the federal government, the amount of money and obligation that's going to be taken on. we seemed to have stopped worrying about that debt, but i guess the total debt in the united states is likely to top, in percentage terms, the gdp in a couple of years. do we need to worry about that >> well, i think we do long-term. of course, the right time to worry about is when the economy was very healthy, in the last few years, it was unconscionable to rack up debt the way we did you know, from 2015 on so i think that's a real problem. but, you know, right now is not the time to be thinking about that you know, once we get out of this, we need to be more disciplined. because, ultimately, if we live beyond our means today, we would have to live underneath our means in the future. but for right now, i think this is about leadership, about helping the country move past this crisis and get through this

crisis and i actually think jay powell is the right man for the job right now. i think he has a very nice, measured tone. he's obviously a very rationale, sensible, calm personality and i think he's actually going to do a good job in talking to people rationally about, look, the fed is going to do whatever -- it's going to do whatever is necessary to help things out the main action, i think, in fine tuning the response to this is really on the fiscal side we need to see better policies to help businesses stay afloat, to help workers get through what could be an extended period of unemployment but i think jay powell will express a message of calm and determination, which i think will be, you know, received very positively by financial markets. >> you know, david, he's almost been plaintive in the past, have ha other fed chaser, in asking congress to come through with other fiscal stimulus and help from that side of the government and now, certainly, the fed has gotten that help from the federal government in the form

of the ppp program and the other -- the $2 trillion that was a part of the earlier tranche of money that was out there. and so, that part of the rescue has gone on and must please the fed. they're not alone. >> yes, i think the fed -- yeah, i think the fed will appreciate the help right now i think that's a positive thing. we're going to need to see more, but also, we need to have a less-political environment in which these decisions are made >> sorry to jump in, but here's jay powell at the podium for the virtual press conference let's listen in. >> both here in the united states and around the world. the coronavirus outbreak is first and foremost a public health crisis and the most important response is coming from those in the front lines, in hospitals, emergency service, and care facilities. on behalf of the federal reserve, let me express our sincere gratitude to those dedicated individuals who put themselves at risk day after day, in service to others and to

our nation the forceful measures that we as a country are taking to control the spread of the virus have brought much of the economy to an abrupt halt many businesses have closed, people have been asked to stay home, and basic social interactions are greatly curtailed. people are putting their lives and livelihoods on hold, at significant economic and personal cost. all of us are affected, but the burdens are falling most heavily on those least able to carry them it is worth remembering that the measures that we are taking to contain the virus represent an investment in our individual and collective health. as a society, we should do everything we can to provide relief to those who are suffering for the public good. while many standard economic statistics have yet to catch up with the reality we're experiencing, it's clear that the effects on the economy are severe millions of workers are losing their jobs next week's jobs report is

expected to show that the unemployment rate, which was at 50-year lows just two months ago, has surged into double digits household spending has plummeted as people stay home, and measures of consumer sentiment have fallen precipitously. hotels, airlines, restaurants, department stores and other retailers have been particularly hard hit manufacturing output fell sharply in march and is likely to drop even more rapidly this month, as many factories have temporarily closed overall, economic activity will likelily dry lily lily drop at n unprecedented rate in the second quarter. inflation is also beingheld down, reflecting weaker demand as well as significantly lower energy prices. both the depth and the duration of the economic downturn are extraordinarily uncertain and will depend in large part on how quickly the virus is brought under control. the severity of the downturn will also depend on the policy actions taken at all levels of government to cushion the blow and to support the recovery when

the public health crisis passes. the federal reserve's response is guided by our mandate to promote maximum employment and stable prices for the american people, along with our responsibilities to promote the stability of the financial system we're all committed to using our full range of tools to support the economy in this challenging time last month, we quickly lowered our policy interest rate to near zero we stated then and again today that we expect to maintain interest rates at this level until we're confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals. of course, lowering interest rates cannot stop the sharp drop in economic activity caused by closures and other forms of social distancing. and low rates will not effectively spur the economy if those rates do not feed through to broader financial conditions or if households and businesses are unable to get credit the economic disruptions caused by the virus created tremendous

strains in some essential financial markets and have impaired the flow of credit in the economy. without access to credit, families can be forced to cut back on necessities and could lose their homes businesses can be forced to downsize or close, resulting in further losses of jobs and incomes and worsening the outcome. preserving the flow of credit is essential for mitigating the damage to the economy and setting the stage for the recovery we have been taking broad and forceful actions to these ends to support the flow of credit to households and businesses, foster smooth marketing functioning and broader financial conditions, we have been purchasing large amounts of treasury and agency mortgage-backed securities the markets for these securities play a critical role in the economy and they came under great stress last month as the scale of economic disruption became clearer and as investors clamored for liquidity our purchases have helped market

conditions improve substantially in recent weeks. in light of this improvement, we have slowed our pace of purchases. we will continue our purchases of treasury and agency mortgage-backed securities as needed while the primary purpose of these securities purchases is to preserve smooth market functioning and effective policy transmission, the purchases will also foster more accommodative financial conditions we are also undertaking programs to provide stability to the financial system and to more directly support the flow of credit in the economy, for households, for businesses of all sizes, and for state and local governments. these programs benefit the economy by providing financing where it is not otherwise available. in addition, by serving as a backstop to key credit markets, the programs can improve market functioning by increasing the willingness of private lenders to extend credit many of these programs rely on emergency lending powers that are available only in very

unusual circumstances, such as those we find ourselves in today. we are deploying these lending powers to an unprecedented extent, enabled in large by part by the financial backing and support from congress and the treasury we will continue to use these powers forcefully, proactively, and aggressively until we are confident that we are solidly on the road to recovery i would stress that these are lending powers and not spending powers the fed cannot grant money to particular beneficiaries we can only make loans to solvent entities with the expectation that the loans will be repaid. many browerers will benefit from our programs, as will the overall economy. but for many others, getting a loan that may be difficult to repay may not be the answer. in these cases, direct fiscal support may be needed. elected officials have the power to tax and spend, and to make decisions about where we, as a society, should direct our

collective resources the c.a.r.e.s act and other legislation provide direct help to people, businesses, and communities. this direct support can make a critical difference, not just in helping families and businesses in a time of need, but also in limiting long-lasting damage to our economy. at the fed, we're doing all we can to help american families and business es weather this difficult period when the spread of the virus is under control, businesses will reopen and people will come back to work. we will continue to use our tools to assure that the recovery, when it comes, will be as robust as possible. thank you and i'll be glad to take your questions. >> tina smallic. >> thanks for taking our questions. you guys have cut rates to zero, you're buying up huge quantities of government debt i guess the question is, what more can you realistically do to help the economy and where do you see a need for

congress to step in? >> so let me say that we're committed to using our full range of tools to support the economy in this challenging time we're going to use them, as i mentioned, forcefully, proactively, and aggressively until we're confident that we're solidly on the road to recovery. and also to assure that that recovery, when it comes, will be as robust as possible. as long as needed, we'll use them and i would just say, we have a number of dimensions on which we can still provide support to the economy our credit policies are not subject to specific dollar limit. they can be expanded as appropriate and we can do new ones will there be a need to do more. congress has also reacted quite aggressively with the cares act and several other laws and that's appropriate with

enhanced unemployment insurance and the paycheck protection program, we've seen an extraordinary reaction but i would say it may well be the case that the economy will need more support from all of us if the economy is to be a robust on one. >> nick timrose. >> thanks, chair paul. nick timrose of the "wall street journal. i want to follow up on gena's question and ask, what specifically do you think elected officials will consider in order to help return or hasten a stronger return to full employment and what policy tools did you discuss at your meeting today to stop a deflationer spirary spirl

>> so let me start, i'll take the questions in the order you gave them. in terms of legislative priorities, we don't -- we're not responsible for fiscal policy those will be decisions for congress to make, but i would say that policies that protect workers, businesses, and households from avoidable insolvency, that keep businesses going, so that they're able to produce goods and to either hold on to their employees or quickly rehire them, those are going to be key policies. they'll come with a hefty price tag, but we would come out of this event eventually with a stronger economy and with less long-run damage to the economy so that's a key thing that really congress could do over time in terms of what we can do, i mentioned, we have pour credit facilities are wide open we can do more on that front in addition, you know, we've had -- we've had extensive discussions, as i've mentioned, done a lot of thinking about what monetary policy might look

like over -- in coming months, over a range of potential scenarios for the economy. we do think that our policy stance today is right where it should be for now. as you know, we cut rates to the effective lower bound and we've si said it will keep them there until we're confident that the economy has weathered the effects of the outbreak and is on track to achieve our goals. with asset purchases, we're continuing to purchase treasury securities and agency, mbs in the amounts needed to support smooth market functioning. so we're doing those things. and i would say that we'll continue to use our tools, as needs be >> steve liesman >> mr. chairman, this is steve liesman with cnbc. i've got two questions here. first of all, why aren't you announcing or conducting a specific quantitative easing

program? and maybe you could explain what the context is now of the purchases that will be made and the amounts that are to come the second question i have is, is the federal reserve really taking enough risk to help households and businesses here in that you just said that the programs that are out there may be best for those who are able to re-pay loans. but don't you have a series of programs, essentially, lending only those able to repay, which is essentially helping those who may need it the least? thank you. >> so, let me say again. in terms of asset purchases and other measures, we dothink our policy stance is appropriate now. we've had discussions, as i've mentioned, over time, and done quite a bit of thinking about what we might do in the future we think for now, our policy stance is appropriate. we're not going to change it now. and we're really waiting to see more from the economy. there are a range of potential

paths the economy could be on. and i think as the time approaches for -- then we'll address your first question, which is about asset purchases but that's not something we're doing today. it's something we have talked about and have -- for now, we like current policy stance in terms of risk, we operate under the laws that congress passes, and there are a number of aspects under section 13-3. and you can see, they've permitted us to move very quickly and move into areas where we've never been before and and do so quite aggressively so i think we're going places and providing help in places where we never have. and i'm glad that we are i think it's appropriate that we are. nonetheless, these are lending powers, and if you read section 13-3 of the federal reserve act,

i know you have, it does require that we be secured to our satisfaction and we can't lend to insolvent companies it's clear, these are lending powers and we are ultimately bound to implement the laws that congress gives us we do not make grants, we cannot make grants. and the reason i raise that in my remarks is that i just want to be clear on that. we can do what we will do. and we will do it to the absolute limit of those powers we'll keep at it and i just want people to know that we will be at it with the legal authorities that we have until we get through this thing. we will keep using our authorities. but there are authorities that we don't have. and there may be a need for those authorities to be used, as well as hours. >> heather wong.

>> it's heather wong from the"te washington post. both on timing the first, do you plan to launch the corporate credit facility and the main street lending facilities in may or early may, anytime you can give us a sense on timing. and the second, in this statement, you refer today, the fmoc refers to a lot of medium-term risks from the pandemic that sounds like you all think this is going to be a long recovery, a long road to recovery can you give anymore guidance on how you all see this recovery taking shape thanks >> sure. in terms of these facilities, the corporate credit facilities are near being finalized and will be operating, i would say, soon, fairly soon. main street facility is -- we're close to announcing -- to issuing a new term sheet we put out a term sheet for

comment a while back and got a couple thousand comments we've carefully studied them we've tried to reflect those in what we're doing now i think with main street, there will be at least a couple of different kinds of lending going on there this is a broad area of the economy with many different kinds of credit needs, so we're going to keep at that for some time, i think, adding in sectors and lending products so i think we'll be at -- we'll probably be continuing to work and expand main street for some time but it won't be done quite as quickly. but the first part of it, i think, will be done fairly quickly. in terms of our statement, so what we said was that we -- i'll just read this sentence. it says, ongoing public health crisis will weigh heavily on economic activity, employment, inflation, in the near-term, and poses considerable risks of the economic outlook over the medium term so the medium -- what we meant by that, over the medium term. obviously, what we're talking about is, you know, not right now, in the very near-term, it's

between now and the long-term. the next year or so. and i would point to a couple of risks to the outlook, what we were thinking of first is just the virus. how long will it take to get it under control? will there be additional outbreaks? will there be drugs that can either treat it or a vaccine of some kind? so all of that is very much shrouded in uncertainty. the second issue, and this is a very substantial one, is just the possibility of damage to the productive capacity of the economy, through a couple of channels the first is just workers who, if one is unemployed for an extended period, that person can lose the skills that are needed, can lose touch with the labor force, and have difficulty restarting his or her career so that's a feature of deep and long recessions. and that's something we've got to watch out for another is just businesses

you know, these thousands of great medium and small-sized businesses that we have all over the country. they're worth so much more to the economy than the sum of their net assets they contain, you know, they're job creators, they're really important. and if we see unnecessary insolve sis, a wave of those, those can be damaging to the performance of the economy over time so the good news is we have policies, as i mentioned in my remarks, we have policies that can address those things, but not perfectly. so that's another risk the third thing i would point to is just the global dimension this is a very global phenomenon and you are -- we're seeing economic data from around the globe, which is very, very negative and that, too, can weigh on u.s. economic performance over time. you know, i would say, just on the u.s. economy, there are things you can say one can say. the first is that in the near-term, we're going to see,

you know, significant declines in economic activity significant declines in unemployment and increases in unemployment we're going to see that as a consequence of the virus and the measures we're taking to protect ourselves from it. the next phases are more uncertain, highly uncertain. but we are go through a phase starting fairly soon where we begin to reopen the economy. and probably the economic activity will pick up, as consumer spending picks up consumer spending, as i mentioned, has gone down quite a lot. it will begin to pick up as people start to return to their normal patterns of spending. but the chances are that it won't go right back to where we were because people will, until they're confident of the -- that the virus is well and truly under control, then they will be somewhat probably reluctant to undertake certain kinds of activities so it may take some time for us to get back. it probably will take some time for us to get back to a more normal level of unemployment and

ultimately to maximum employmen employment >> james pulliti >> thanks, chair powell. you didn't firm up your guidance on -- this is james pulliti from the "financial times." you didn't the "financial times." you didn't firm up your guidance on interest rates at this meeting. given the risks you just outlined, under what circumstances would you strengthen the fed's commitment to keep rates at the lower bound? is there any danger to delaying that and on the credit facilities, what kind of demand are you expecting for the programs that were set up under the c.a.r.e.s. act and are you expecting them to rapidly reach capacity like the ppp plan did >> okay. so on the first as i mentioned, you know, we moved very quickly, very aggressively. we were the first to return to the effective lower bound where we are now we got there essentially right away and we think that's the right

place to be. we think if you look at surveys, you look at market pricing, the market expects us to be there for a good while, and that's appropriate. so, you know, it's not as though the market is pricing in a near-term liftoff or anything like that. let me just say, we're going to not be in any hurry to withdraw these measures or to lift off. we're going to wait until we're quite confident that the economy is well on the road to recovery. so we don't see -- we see our current stance and our current guidance and i would say the same thing about asset purchases that we see them as appropriate. i've mentioned a couple times that we have done a lot of thinking about what monetary policy might look like over the coming months, and that would, you know, depend on where we are in a range of potential economic scenarios. so we are thinking about that all the time, but right now, for

now, we think our current stance is appropriate so we've made no change in it today second question was -- so the thing about our facilities is treasury still has plenty of equity so we've said that if demand for our facilities is greater than we've stimated, then we'll expand them, and we have the ability to do that so it won't be the way the paycheck protection program is where there's a specific amount allocated, appropriated for it, and then there's no more money that will be unlikely to happen here unless we exhaust treasuries equity and we're a long way from doing that the second thing i would say, you've all seen this, when we announce these facilities -- and i mentioned this in my remarks -- it's not just the actual lending we do we build confidence in the

market and private market parents come in, and many companies that would have had to come to the fed have now been able to finance themselves privately since we announced the initial term sheet on these facilities so that's a good thing companies are out there financing, raising liquidity we haven't made any corporate loans in those facilities, short-term money market loanings but we haven't made any of them, and yet there's a tremendous amount of financing going on and that's a good thing. for that reason, the ultimate demand for the facilities is quite difficult to predict because there is this announcement effect that really gets the market functioning again. of course we have to follow through, though. and we will follow it through to validate that announcement effect >> howard schneider. >> hi, chair powell. thanks for joining us. i wanted a little more expansion on the timing of recovery and

the connection between the health response. you said earlier i think that you thought the second half of the year could see a pretty robust rebound is that now out of the question? and do you think a steady recovery is really possible until a vaccine is developed given the patchwork of measures we see taken around the states will that lead to a steady path out? >> as you know, economic forecasts are always uncertain today they're unusually uncertain and that's really because so much of the performance of the economy depends on the path of the virus and the success of the measures we take to control it. our success in reopening the economy and also the time it takes to develop new drugs and our tools, the things we do, don't affect any of those things we're not experts on those things either, but what the experts tell us is that the outcomes are highly uncertain. this is a new kind of

uncertainty added on top of our regular uncertainty. i will say, i think there are a few things you can say about the path ahead first, this time now is going to be a time of sharp contraction in economic activity, high unemployment, personal consumption expenditures declining sharply, business investment as well, unemployment moved up we're going to see economic data for the second quarter that's worse than any data we've seen for the economy. a and they're a direct consequence of the disease and the measures we're taking to protect ourselves from it. then we're entering this new phase and we're just beginning to maybe do that where formal measures that require social distancing will be rolled back gradually, and at different paces in different parts of the country. and in time, during this period, the economy will begin to recover. people will come out of their homes, start to spend again.

we'll see unemployment go down we'll see economic activity pick up and, you know, when will that be it's very hard to say. let's just say for this purpose that it's in the third quarter so as i mentioned earlier, that could be a fairly, you know, large increase given the size of the fall, the increase could be substantially large, although it's unlikely that it would bring us quickly all the way back to precrisis levels of course this is the period as well that carries the risk of new outbreaks of the virus, something we really want to avoid. i think then, after that period, at some point you will have, you know, the kind of formal social distancing measures will be gone, but you'll still be left with probably a level of cautious on the part of people who will worry and probably keep worrying for some time you would think that behavior will change as people gain confidence so the sooner we get the virus

under control, the sooner people can regain that confidence and regain their economic activity i think trying to be really precise about when that might happen and what the numbers might look like is -- i think it's very tough to do that >> okay. steve matthews >> steve matthews with bloomberg. chairman powell, you've noted a number of times over the last year that there's been a broadening out of job gains with marginalized workers, people who have been left out of the recovery over the ten-year period, finally job gains and particularly minorities but also many other workers do you worry that this recession is going to fall hardest on those workers who struggled and just got job gains in the last year or two and that it may take years from now before there are opportunities for them again

>> yes that's exactly what i worry about. so unemployment has tended to go up much faster for minorities and for others who tend to be at the low end of the income spectrum and it tends to come down faster as well, but it tends to go up faster and be much, much higher. and we were in a place only two months ago, we were well into beginning the second half of the 11th year is where we were, and every reason to think it was ongoing. we were hearing from minority moderate income and minority communities this was the best labor market they'd seen in their lifetime, the data supported that as well, and it's heartbreaking, frankly, to see that all threatened now. all the more need for our urgent response, analysis by congress,

convergent and large, to do what we can to avoid longer-run damage to the economy, which is what i mentioned earlier this is an exogenous event that -- it happened to us. it wasn't because there was something wrong with the economy. and i think it is important that we do everything we can to avoid that longer-run damage and try to get back to where we were because i do very much have that concern. i think everyone is suffering here, but i think those who are least able to bear it are the ones who are, you know, losing their jobs and losing their incomes and have little cushion to, you know, protect them in times like that. so, yes, that's a very big concern. >> victoria. >> hi. victoria guido with politico the patriot protection program

has experienced some logistical problems because of the speed at which all of this is happening, but for the main street lending facilities, which will also work through banks, what lessons are you taking away from that? and then more broadly, you know, you mentioned earlier this year that federal debt was on an unsustainable path, and i was just wondering for republicans that are starting to get worried about how much fiscal spending they're having to do in this crisis, you know, whether that should be a concern for them >> so a couple things. this is different from the ppp, paycheck protection program in two ways one is these are not grants. these are loans. so i don't know that the demand will be quite as strong as it has been for the ppp i don't know that, but -- and the second thing is we won't run out of money you know, it's not a limited pot. so there won't b