Powell Faces Lawmakers’ Skepticism On Some Fed Aid Programs

The report from the Select Subcommittee on the Coronavirus Crisis concluded that 383 companies whose bonds were bought by the Fed had continued to pay dividends to shareholders, with 95 of those companies also laying off workers. The report said fossil fuel companies accounted for 10% of the Fed’s bond purchases even though they employ just 2% of the workers at larger companies.

“Many large layoffs have occurred among the companies whose bonds were purchased by the Fed, suggesting that the primary beneficiaries of the program have been corporate executives and investors not workers, the report said.

Testifying on the second of three days to Congress about the government’s rescue assistance, Powell took issue with the report’s findings. He said the Fed had structured its corporate bond purchases, spread in relatively small sums and covering more than 800 companies, to ensure that it wasn’t favoring any particular companies. He noted that the corporate bond purchases were made in the secondary market and not directly from the companies.

We didn’t want to be deciding which companies to help, Powell said.