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Boston Federal Reserve (Fed) Bank President Eric Rosengren said in an interview with The Associated Press (AP) late Wednesday, the Fed’s new Main Street Lending Program, announced in March, could aid a slower-than-expected recovery from coronavirus induced economic downturn.

Key quotes

“The program will act as “an insurance policy in case things don’t go as well in the second half of the year as we hope.” 

“Companies that still suffer from weak demand or from an eventual second wave of the coronavirus might be unable to borrow later this year because many banks could be saddled with failing loans. That shortfall would likely boost demand for the Fed’s Main Street program.”

“I think many businesses are now realizing … that this may be a much more extended and slower ramp-up than they were hoping.” 

Market reaction

The US dollar extends its rebound across the board heading into the European session, as the downbeat market mood persists amid deepening US-China tensions over the virus mishandling.