Read on Twitter
OVERSIGHT HEARING ON STATE MUNICIPAL LENDING: Why is the Fed offering so little support for state and municipal governments? Let's find out in this THREAD:
@federalreserve's Kent Hiteshew continuing to evade arguments in favor of greater support for state and municipal lending ... The Fed has used 0.3% of its $500 billion facility while pumping money into corporate markets
@BharatRamamurti points out, the Fed is giving “no strings attached support to some of America’s biggest corporations” while the municipal and state governments face tough conditions, ones that hurt first responders crucial to #COVID19 response
A reminder: @federalreserve is buying bonds ABOVE PAR for corporations https://prospect.org/coronavirus/unsanitized-federal-reserve-overpaying-banks-hedge-funds-corporate-bonds/
However, @SenToomey wants to wind down the Municipal Lending Facility, thinks it has served its purpose.
Hiteshew says muni bond rates are very low, easing refinancing of existing debt, which indicates the Fed is doing its job of supporting liquidity
Hiteshew adds that munibond markets are different than corporate bonds, and creating a secondary market facility for muni market would have been too complicated
Hiteshew says market participants don't want a new facility or different conditions. Maybe he's not reading his mail? A big group of state treasurers, local officials, labor unions, and public interest groups say otherwise. https://ourfinancialsecurity.org/2020/07/letter-to-regulator-improve-fed-facility-to-help-states-and-municipalities-handle-coronavirus-crisis/
