Jerome Powell

The Federal Reserve is monitoring the COVID-19 issue and its economic effects, according to a release from the central bank, attributed to Chairman Jerome Powell, released Friday.

Federal Reserve Chairman Jerome Powell told senators that the central bank is willing to explore a credit-sensitive interest benchmark in addition to the secured overnight financing rate, which some banks say could cause problems during economic stress.

Unlike previous central bank chiefs, Powell’s chances of being renominated by either the current president or many of the Democratic contenders are slim.

Financial regulators have been put on notice about the risk of an economically damaging cash crunch in the home mortgage market. Behind the concern: the rapid growth of shadow banks in the origination and servicing of home loans.

The Federal Reserve reduced short-term rates for the first time in years, and accelerated its plan to stop shrinking the Fed’s balance sheet by rolling maturing mortgage-backed securities into Treasuries.

The Federal Reserve will roll its maturing holdings of mortgage-backed securities into Treasuries starting after September, capping it at $20 billion per month.

It's not clear exactly what might pull investor sentiment and 10-year Treasury yields, which rates for the 30-year mortgage are benchmarked to, off the current lows.

There is no banking crisis, but the president’s actions are threatening to create one.

Interest rates are nearing the neutral level — the rate that neither stimulates nor restrains economic growth — Federal Reserve Board Chair Jerome Powell said Wednesday.

Another regulator has already gone out on its own with an advance notice of proposed rulemaking. But, Powell said, "It’s a process and we’re very much interested in pushing forward.”