By Joy Wiltermuth
“Can’t we think more creatively about how banks are handling savings for these communities?” he asked, while also pointing out that low rates discourage saving and encourage risk taking, at a time when many young people aren’t taught about how markets work.
“Right now they are teaching them you’re going to get nothing for putting your money in the bank,” Canada said, also warning that the federal government’s pandemic response is sowing the seeds of the next generation of inequity.
“There’s a certain portion of America that’s going to be devastated, unless we act quickly,” he said.
U.S. stocks were modestly higher Thursday, a day after the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.66% advanced 530 points, on renewed hopes that Washington might pass additional fiscal stimulus to help shore up households, states and businesses during the pandemic, just a day after a tweet from President Donald Trump called for an end to negotiations on pandemic relief and set off a sharp late-day market selloff.
Federal Reserve Chairman Jerome Powell has made it a mantra over the past several months that the shape of the U.S. economic revival from the pandemic will hinge in part on the fate of America’s hardest-hit populations, including essential workers.
But Powell also repeatedly has stressed that his emergency tool kit consists of “lending, not spending” powers, and that Congress would need to provide additional fiscal stimulus that puts money directly in the pockets of workers impacted by the pandemic.
Yet the Fed’s series on racism and the economy already has highlighted how the Fed might harness some of its tools to spur economic opportunity in communities that have been left behind.
Eric Rosengren, president of the Boston Fed, said on Wednesday that the central bank’s extensive data and research efforts show racial disparities in wages and employment.
He pointed to a recent Fed study that showed how its efforts in the realm of monetary-policy easing haven’t reached many Black homeowners, mainly because few rushed out to refinance their homes at today’s historically low rates.
White homeowners, meanwhile, lined up to refinance soon after the Fed announced it would resume buying government-backed mortgage securities, which helped lower borrowing costs.
The Fed’s takeaway: that it needs better ways to get information into the hands of all consumers, so they can make the most of its policies.