Balance of opening our business, but they will only be as successful as the Customer Confidence that is there to patronize those businesses. That is not just for the hospitality. That is true for all business. Retail has been the hardest hit. My understanding is over 2 of businesses have closed permanently already. How are we to address this Consumer Health issue . I know this is something you have talked about. What should we be doing . Chairman powell it affects different sectors of the economy differently. The ones we talked about are the ones we are exposed to. Other sectors of the economy may be able to recover much more quickly, and we certainly hope so. Thing is people believing it is safe to go back to work. That is about having a sensible, thoughtful reopening of the country, something we all want. Something we are in the early stages of. That is what it will take for people regain confidence and resume their activities. At a different pace depending on the nature of the business, the nature of the activity. Sen. Cortez masto and the health care piece. So they still feel safe going back out and deal they will be healthy and safe. Isnt that true . Chairman powell it will be a combination of getting the virus under control, development of therapeutics, development of a vaccine, all of those things. Also seeing what your eyes are telling you good you can feel it already that people are doing things they would not have done two months ago a little bit at a time. I think that process will pick up your sen. Cortez masto will pick up. Sen. Cortez masto until that happens, many are relying on their state and local governments as a social safety net. They are looking to local governments and state governments for how they can stay safe, where the Health Care Facilities are, how they can get tested as needed in contact tracing. That is where they rely . Chairman powell i think that is where the decisions will be made, state and local government , also individual businesses. We talked to a lot of businesses and nonprofits and leaders. Larger ones, the there is a thoughtful process going on. Ultimately, people make their own minds up. You can change the formal social distancing measures, but ultimately people will decide what they should and should not do with themselves and with their families. That will boil down to have a pretty good confidence is safe to go out. Sen. Cortez masto i agree with you. I know in my state, many are waiting to rely on state and local governments to help them make those determinations. That is why funding for state and local governments is important and i cannot state that enough, not only in the next fiscal package, but you also touched on it, the municipal lending. I would like to see more of that available to smaller populated states and local governments good nevada has 3 million populations. To gives to be a way the opportunity to get the liquidity or the funds they need to ensure they are providing that safety to consumers in general. I know my time is up. Secretary mnuchin, ive questions for you as well. I will sum it does the record. Thank you both for joining today i will submit it for the record. Before i moved to senator max sally, i will announce that a vote started 10 minutes ago and we still have a number left to go. Please Pay Attention to the clock good sorry it turns out the way at the end of these hearings. Senator max sally . Senator mcsally . Mcsally good to see you. You know china unleashed this violence on the world, costing 90,000 american jobs american lives. We do not know who patient zeros. They destroyed samples, they silenced doctors and kicked out journalists. Impacted International Travel to see this in their reckless behavior continues to be at the root of all of this. As you know, this is why we are here. We are talking about the economy, which is strong, now really struggling. People all over arizona are struggling because of the calamity that has come from this virus. Doot think anybody either of you think there is any reason we should be rewarding china or Chinese State owned enterprises for individuals or entity that want china to prosper as we implement these massive initiatives to support the american economy. Is it fair to say neither of you want that to happen. Sec. Mnuchin that is correct. Chairman powell that is not a question for me. We are the economic response to this. Sen. Mcsally none of us as americans want to see china or chinese owned enterprises prospering. I want to talk about a Company Called blackrock. On march 24, the Federal Reserve bank of new york retained blackrock as a financial agent to transact with primary dealers in the primary market Corporate Credit facility in the secondary market Corporate Credit facility. As you know, these facilities serve as markets for companies to sell bonds and obtain loans during the downturn. Typically, there is a competition, a Competitive Bidding process, but blackrock was selected for this one. As you probably know, blackrock is one of the leading investment banks and chinese bonds, including helping Chinese Companies lift and go on american stock exchanges. Chinese Companies Listed on american exchanges are prohibited or prohibit the Public Company accounting Oversight Board from reviewing their audit reports. On blackrocks website, they have a page titled five myths and realities about investing in china. According to blackrock, one of the biggest myths about china is Chinese State owned enterprises do not control their economy. Blackrock even tried to back that up with data. I will not go into all of it, but it is ridiculous. To china doese not mention anything about human rights abuses, the hong kong democracy protest, or that the country is ruled by a communist party good they are one of the Worlds Largest investment banks and allegedly a stable of free markets neglects to mention the fact that communist run china, all while refusing to invest in legitimate and Legal Industries in america that is a separate issue. My question is how and why did blackrock get selected as a financial agent for these facilities . How much money do they stand to make and what if anything will prevent blackrock from taking the profits they earn to invest in their interest in china and Chinese Enterprises . Chairman powell we hired blackrock for their expertise. Was done very quickly due to the urgency. We were real we will revisit the contract as we in practice do Going Forward good that is where that is. Publics are matter of record and we would be happy to supply those. Sen. Mcsally what can we do to prevent any of their profits from benefiting china and chinese data companies, which they are severely invested in . Chairman powell i would say this. All large Asset Managers buy chinese securities. These are global Asset Managers. Im not here to defend or criticize them for that. It is not relevant to the work we want them to do. What we are trying to do is create conditions in which u. S. Workers can keep their jobs are returned to them. That is what our focus is. Were not trying to reach out for other Public Policy objectives or deviate from that, we have a laser focus on that and we have concluded this company was the right one to be our agent. Their views on anything else are not important. What is important we do everything we can to support the United States. Sen. Mcsally it is important to all of us. Thank you for your leadership. To support our economy, to support jobs, but it is also important that we wake up as americans and we hold china accountable and they are not allowed to profit because of these investments taxpayers have made. I will followup you with you on these issues. I think blackrock and others need to wake up and do their patriotic duty, see what is going on. Communist china should not be profiting off of unleashing this calamity on the world and that should be something that should unite all americans, even if they work at blackrock. Senator jones . Jones of followup. I agree we need to hold all people accountable. China, the who, folks in this administration, Everyone Needs to be held accountable if they had deficiencies. Secretary mnuchin, let me say isil recently that the treasury will begin issuing debit cards for americans. Senator cant deny sent a letter encouraging that. I sent ar cotton and letter encouraging that great i believe it will quickly get money to many of those americans. I wanted to ask you about the payroll protection program. As we have talked about early on in the first round of funding, there were problems with the banks and there were underserved communities that are not getting their funds. We have tried to correct that and are doing much better, but the sba Inspector General issued a report in the wake of that that recommended the agency start collecting demographic information on who got those loans. Can you commit to work with the sba administrator to make collecting demographic information mandatory for the ppp loans if there is that much needed transparency . You inuchin i can tell the forms the lenders are wired, there is demographic information. We have been advised to make that optional and not mandatory. We very much hope people provide that. Let me say we are committed to make sure we serve the underserved communities with the money we have left. Sen. Jones thank you. Powell, i also saw your speech and read your comments and saw the 60 minutes piece. It reminds me of listening to some of the comments about judge taylor in to kill a mockingbird said, people will hear what they want to hear and see what they want to see. What i saw as a call to action. One of the things talked about is that 40 of americans that have lost their jobs and how it is affecting our minority communities, not only their health. What is being shown is the disparities on so many things. You mentioned how this pandemic can exacerbate the existing gap of wealth and assets and ownership between minorities and even poor people in general good we started this pandemic with 40 million poor people. It will get much bigger than that and it will be across racial lines. What can we do to try to narrow that gap and make sure the wealth gap does not even get greater as we open back up this economy . Chairman powell the job losses that have been happening have been happening in a service economy, particularly those parts where you are directly with people. Less wellpaying jobs and that sort of thing. If you look at the industries that have been hard hit, it is those industries. Restaurants, hotel, travel, things like that. Retail. Report, thethat survey of Household Economic decisionmaking, there is a lot in there. It is stunning how quickly households get into financial trouble. How little lower income houses have in the way of financial resources. These are longerterm problems to deal with. For now, this calls on us to do what we can to support the economy. As i mentioned earlier, we have 27 Million People out of work. We want to do everything we can to create a world where they can go back to their jobs. That is something all of us on policymakers should be strongly focused on. Sen. Jones thank you for that. It seems to be connected to your we keep making sure people in their livelihoods, we keep the unemployment numbers down. I think from our standpoint, we have been focused on both saving lives and saving livelihoods. While we do not want to give folks incentives to stay on unemployment, we do want to give incentives to businesses to open carefully. I would encourage you to look at the Paycheck Security Program that senator warner and others will be filing this week so we can give these opportunities. I am assuming the more opportunities we can give employers to keep people on their payroll with benefits, that would aid in opening up economies safely and trying to keep us from getting into that longterm recession. With that be fair . Chairman powell i would be happy to take a look at your legislation proposal. Sen. Jones thank you, i appreciate the opportunity. Thank you for coming. Senator moran . I had more times i would extol the virtues of the secretary and the chairman and their team during this crisis. I hope you understand the sentiments that that sentence expresses. I want to focus, i guess, secretary mnuchin, we have talked about ppp and seen the positive consequences that have come from the program. Inre are Large Businesses which the facilities are being developed to assist, but im worried about other businesses. I would use an example, not that i am lobbying for any company, but it example that comes to my mind in kansas is yellow roadway. It employs almost 30,000 people. It is not investment grade. It has leverage, and it is a company that in the absence of assistance, the jeopardy of its employees are significant. There are a lot of Companies Like that. There are number of other companies in kansas like that. I want to make certain we are doing the things necessary to prepare to be of assistance to them. Senator toomey and senator warner indicated that very few of us expect the treasury not to have to take losses, there needs to be some risktaking. I want some kind of assurance facilities,he b4 that these kind of companies that are hugely important to the economy can receive some assistance with the facilities at treasury and the fed. Secretary mnuchin, is there some level of comfort i can have . Sec. Mnuchin you have my assurance we will look at that specific company and see what we can do and get back to you. Sen. Moran i hope it is more than that because it is not just that company. There are number of Companies Across the country that this is hugely important. Sec. Mnuchin Companies Like that, we want to make sure there are facilities where companies do not fall through the cracks. We are trying to do as much as we can within our powers. Sen. Moran let me suggest you that timing is of the essence. The circumstances Companies Face today in layoff and furloughing employees are present and around the corner. I encourage the thoughtful action in addressing the circumstances. Let me see if i can get two other questions in. Timeframe, mr. Secretary, for further guidance regarding ppp loan forgiveness . There is some guidance that just came out on loan forgiveness which we believe deals with the major issues. Sen. Moran secretary mnuchin, does treasury and sba planned issue guidance that would allow 501 c 3 organizations to utilize the alternative size standards for ppp eligibility . Sec. Mnuchin we are reviewing that specific request. We have had that request and we are reviewing it carefully. Sen. Moran is a decision close to being imminent . Sec. Mnuchin we will decide one way or another what was it whether we can do that. The answer is yes. Sen. Moran thank you mr. Secretary, thank you mr. Chairman. You get a gold star for yielding back a minute or so. Our final senator for questioning is senator smith. Chair. Ith thank you mr. Thanks to both of you for being here. Chair powell has talked about how we cannot solve the economic crisis without the Public Health crisis, which i agree with. Senator mnuchin, you said we need to open the economy, in a thoughtful way, which i also agree with. It seems an important part of being thoughtful is to see that americans have Accurate Information about what is going on. I have no doubt youll be surprised to hear that a lot of us were taken back when a couple of days ago we heard President Trump say this, they think they are taking away Donald Trumps greatest tool, which is to be able to go into an arena filled with 50,000 people every single time. They will, and you watch, they will milk it every single day between now and november 3, and guess what, after november 3 the coronavirus will suddenly go away and disappear and everybody will be able to reopen. This is the kind of misinformation that concerns me greatly. Secretary mnuchin, are you aware of any evidence that eric trumps assessment is accurate . Sec. Mnuchin i did not see erics comments, door do i think it is appropriate for me to comment on that one way or the other. Sen. Smith i dont think it is accurate and i think it is the kind of misinformation that is damaging and undermining of our economic approaches and our policy approaches. You, secretary powell , even before the covid19 crisis, many in minnesota were struggling to find an affordable place to live. Last year i spoke with hundreds and hundreds and family and Community Leaders about this challenge, Housing Developers as well. They all told us that it every part of the housing continuum, from housing for Homeless People and Supportive Housing all the way up to workforce housing, this is a significant problem and a significant affordability challenge. Now we have this coronavirus challenge. I, along with many of our colleagues on this committee have been pushing for support for housing. 11. 5 billion for homeless assistance, 100 billion for rental assistance, and 75 billion dollars to stabilize homeowners. Could you talk a little bit about the importance of the housing sector in our economy and what challenges you see ahead for us as we are living through this crisis . I appreciate what you said. The most him or policy objective should be to keep people in their homes and paying the bills. Chairman powell these are longer running problems which are under particular pressure right now. A lot of the jobs are in big urban areas. More and more that is for the job creation is and yet the cost of living in those places is higher and higher. Very high. Often people in the Service Industries providing their services have to commute long times to be able to live in a place. It is an issue that has been with us for a while. It is not one the fed can affect, much other than by affording fair lending laws. They are important to our economy. Sen. Smith i realize you do not want to comment specifically on the specific policy issues we have confronting us in congress, but in general, do you see a risk to the Housing Market as the economy continues to take a downturn in the months ahead . Chairman powell i think there are multiple risks. Forbearancextent does not do the job. You may have people losing their homes. Even if this is a natural disaster, it is something that would be great to avoid. You see the housing industry coming under great pressure. That is a lot of jobs. It comes down to thoughtfully opening up the economy in a way that builds confidence and keeps people safe. That is important we do that well, and if we do these other things well, they will take care of themselves over time. Sen. Smith this is an issue i think we should continue to work on. The Ripple Effect of people not being able to pay the rent and the mortgage and the impetus that has through the housing continuum is a great concern. If you do not have a safe place to live, nothing else in your life works. This is something important for else to address in the next package. Thank you very much, mr. Chair. Thank you. We have been joined by senator cinnamon. She will be the last question arer. She will be on audio only. If you finish in five minutes, i may make it to the vote. Day arizonans are worried about their health and their future. That is why it my office has doubled their state team to better serve arizonans. Our goal is to offer topnotch constituent services and going the extra mile. I am glad we are having an oversight hearing today because robust congressional oversight is critical to ensure we know where the cares act money is going. It is also vital to ensure arizona is not stopped with government bureaucracy. I am concerned with cutting through the red tape. Lets start with the Economic Injury disaster loans. On april 17tter outlining my concerns about how the administration has run the program. The cares act promises Small Businesses a 10,000 loan advance within three days of their application. I know arizonans who went through this process. None of them got their loan advanced in three days and no one received the full 10,000. Why are they getting the full amount and why are they getting it on time . Sec. Mnuchin let me apologize that youve not received a response. I will look into that and get back to you. Programates to the idle , that is within the sba. The sba has a significant systems issue getting the idle program up and running. I thought the grants were doing much better than the loans, so i will look at that. On the loans, rebuilding the entire system, because you know we have only over 5 billion loans to process. We will follow up with you. Sen. Sinema as you know the sba change the policy to only issue 1000 loans per employee. The original plant was 10,000 per company. Who authorized the change and why was it made . Sec. Mnuchin the sba administrator made that change and i believe her thought on that was there was limited money and to try to spread it out amongst as Many Companies as possible. Sen. Sinema and she did not think to herself lets go back and ask congress to authorize more funding to pay for that which they appropriated and called for in the legislation . Sec. Mnuchin there was additional money in the second phase and we appreciate that congress reacted to that. Is thenema my question sba made this internal change without authorization from congress. If they are saying they did it because they did not have enough money, they have more money and they have not used it to give to people as promised, the 10,000 in the original legislation. Sec. Mnuchin i am more than happy to followup with you. I am not involved in some of the direct specifics of that. Let me follow up with your office. Sen. Sinema i appreciate that, secretary. Let thing i will say about the idle loans, my office is working on over 300 outstanding pieces. Some of them dating all the way back to march. What can your team do to get the cases move through quickly . Sec. Mnuchin we will work with the sba to followup. That is not acceptable. We will follow up. Sen. Sinema i appreciate that. Ive questions about the Paycheck Protection Program as well. Small Business Owners in arizona are asking for guidance on how the loan forgiveness works. The lack of guidance has made it difficult for Small Businesses to plan. We received some guidance last friday and more is two. To getit taking so long guidance for Small Business . It was a very complicated program we set up in a short time. I thought the guidance we put out dealt with the issues, but if there are specific issues you are hearing from, we will followup with you and provide that clarity. Sen. Sinema i appreciate that. We would like to followup specifically. The application to get your ppp loan was only one page long, but the forgiveness application is 11 pages long. According to my staff, it requires a minimum of three hours to complete. This is a real problem for momandpop shops in arizona. What efforts can be offered to assist Small Businesses in filling out the complex form . Sec. Mnuchin i spent a lot of time on the complexity of that. We try to get it as short as we could under the requirements of the law. I hope it does not take three hours for Small Business. We try to make it as short as possible. Sen. Sinema i appreciate that. Mr. Chairman, i see my time has expired. I would like you to make it to the boat. I have more questions. I will smit some in writing. Thank you very much. I will submit some in writing. I appreciate that. I understand senator brown one i will do so. Thank you. Thank you, chair powell, secretary mnuchin. Pin andn my lookout, a a good gauge. Not a story of the mine workers. We didnt have a union Strong Enough to protect them during those days or a government Strong Enough, and that is why. E had a new idea wha now millions of americans dont have a union to protect them after decades of corporate attacks. Based on the responses we have heard today, especially from the president over the past few months, it seems again workers dont have a government that cares enough to protect them look at how the administration treats essential workers, especially africanamerican and latino workers, looking to the are willing to spend their money on. This administration tells us everything we need to know. That is why Congress Needs to stand up for workers, that is my workers need union, so we can fight for protections and the dignity they deserve and for american values. Thank you for allowing me the last minute or so. I also want to thank you, youror brown, for cooperation, working with us to have this hearing. I appreciate the cooperative way in which we have been able to work on these hearings. I do disagree with the notion and our secretary chairman here are not working very hard to make sure that the support we have voted on gets out to those very people, those that have these lower paying jobs, those in the service , thetry, Small Businesses mediumsized businesses, and those places that will be needed to stand up our economy as we have the opportunity to do so. We may have a different point of view on that, but i appreciate your support in helping to get this hearing set up and working. To our witnesses, secretary mnuchin, chairman powell, i appreciate your cooperation and working with me as we put together this hearing. We are piling new ground in the senate, as is happening across the nation as we deal with covid19. Usr cooperation working with in this hearing and getting your report to us is deeply appreciated. With that, for senators who wish to submit questions to the record, those are due tuesday, may 26. I ask our witnesses to respond to those as quickly as possible. In, thank you each david this is balance of power on Bloomberg Television and radio. Im david westin. We have been listening to and watching live testimony from the Senate Banking committee. Fed chair jay powell as well as secretary of the treasury Steven Mnuchin, about the implementation of the cares act, injecting trillions of dollars into the u. S. Economy. Go over what they discussed, we have michael mckee. It strikes me, this is about the cares act, but a lot of the questions from the democrats was not about that at all, but what comes after the cares act. Mike in fairness, they were framed in terms of the care act and how it was being administered. Lots of questions about programs within that. Small and mediumsized businesses, questions about why that is not up and running and when that will be. He said it should be by the end of the month. That questions about who would be eligible for the loans. A lot of concern about where we go from here, whether companies will still be around when the economy starts operating again. Similar questions raised about the Paycheck Protection Program and some of its rules and regulations, including the idea that you could keep people on perils for eight weeks payrolls for eight weeks. Everyone getting the money said that was not long enough because the economy is not open yet. Also questions about the secondary lending program, some questions about whether the fed is taking on risk that it does not need to. Jay powell said we are not buying junk bonds across the board. We are buying some fallen angels. The idea is we keep the market open. We are not trying to load up on these bills. About thehey talked municipal lending facility, and a lot of concern among democrats that cities and counties will not be able to make it through the end of the fiscal year, will have to lay people off. Both powell and secretary mnuchin suggested they would have this facility up and running soon, and it will help, but this is where jay powell suggested congress may need to do more. He stayed away from giving advice can, but suggested their lending program, not a spending program. If you want to assist people, you have to consider how to do it. That is basically the highlights, with the exception of steve mnuchin, according to the treasury market, he wants to the treasurys borrowing as they try to fill the deficit hole, buying more longterm securities. David you say they will get this main Street Lending program up and running by the end of the month. Is there some irony here, that when they first passed this act, we have to help the Small Businesses, but apparently, it has issued more loans to big businesses and Small Businesses. What they are finding out is mediumsized businesses are the hardest to lend to at all. Big businesses can go to the capital markets. That is what they essentially tried to have them do. Those markets, put money into make sure that they would function, that there would be buyers and sellers. The Paycheck Protection Program got off to a rocky start because it didnt have enough money initially and the banks were not sure what the rules were. They tended to lend to their existing customers because of laws that require them to know who their customers are, prevent laundering. It is the mediumsize businesses that are in trouble because the fed has taken so long getting this up and running. They cannot get stuck with bad loans. So how do you evaluate a lot of maybe private companies that dont have borrowing track records, how do you know they will pay back . That is one of the holdups. All of this was passed with good intention, but we know what road that has paved. David there was an awful lot of talk today particularly from the democrat side about state and government support, support for people on the front lines. Im sure that has to do with what nancy pelosi has proposed for the next phase, if the democrats were looking for jay powell to give them support in this way. Im not sure that i heard it. Mike you didnt. He was much more forthright in the way that he advocated. He said the fed and the Congress Need to do more. He told cbs that congress could do a lot more. One of the Major Concerns democrats have had, state governors have had is they are going to run short of money and these First Responders will have to lose their jobs. There is also a shortage of money for hospitals that have had to get rid of elective patients. Treat covid there is the shortfall of money, that the people who have been dealing with this firsthand, are the ones that end up losing. Suggested more needs to be done but he did not go down the road advocacy today. David we listened to more than two hours of this testimony. Is in your impression that change . Ng will i understand they will do this every quarter, to see what is going on with the cares act. Will it change anything at the Treasury Department or the fed . Mike a lot of the topics that came up are subject to legislation. Secretary mnuchin said they were considering tweaks to the Paycheck Protection Program. The fed is working on the main Street Lending program. Altogether there are Lessons Learned that are going into what happens next, both in new programs and the programs they are managing now. Jon tester also had an interesting point. While everyone has promised some sort of transparency with the loans, the data has not been posted yet. That will be one change that im sure will come along quickly. Putting up who borrowed, how much they borrowed, and then congress will dive into whether it is fair or not, how it was all handled. Exchange between senator tester and secretary mnuchin where he said, it is on the website. I cannot find it. Great to have you on these issues, michael. The reason we had the cares act economyelp the recover as soon as possible. Earlier, we spoke to brian whether he thought the recovery would happen as soon as he thought it would. Brian this is a Health Care Crisis. As you see the Health Care Crisis become mitigated, you are seeing the economy start to recover, and we can talk about that. The approach to winning the war against the crisis for us has been a customer sector, employee centric move centric, employee centric move. Making sure they have the credit and capital to do what they need to do, help them through this activity in the second quarter. You can see that in the loan balance extended to ppp loans. Customers have the ability to have better cash flow in the house. Byhave helped our teammates saying no layoffs, so they are secure, getting them working from home. We have helped with community contributions, community institutions. About 170 million is already out. All of that is impacting the second quarter. Muchnt see it differently, but we are starting to see us coming out of the other side, frankly. David we have heard from the Federal Reserve, and they have expressed concern that as this pandemic continues, there may be a threat to the overall system, specifically commercial real estate. Are you seeing some parts of the market that are particularly vulnerable on the credit side . The u. S. Economy will be dependent on the activity of the consumer base. You always have to start there when you talk about the u. S. Even though we have the best Research Team in the world, being 5 this year, the real question is how consumers behave. What we have seen since the low point since the first couple weeks of april, in terms of their spending, because of the les, borrowingu activity, transfer of money, all of that fell to the lowest level. Things like travel and hotel were most affected. As he went steadily through april and into the first part of may, you are seeing activities pick up, even in states that are still under stay at home. You are seeing activity pick up quicker where they are going back to work. For the month of may, we are seeing it down 3 , 4 versus last year. The length of this is based on how the consumer behaves, given the high levels of unemployment you have seen published. When you have jobs coming back in, the stimulus payments, which are hitting the streets in the last few weeks, to see how that works to change consumers behavior, the concern i have is if we had changed Consumer Behavior looking out over the next six quarters. David that is maybe the key question. When it comes to the consumer, i know you have taken 4. 8 billion in credit reserves against losses. Do you think that will be enough . Brian what you have seen so far with Consumer Health, we granted about 1. 5 million payment deferrals. If you look at the statistics, about 40 of the people who asked for a credit card deferral went and it made the payment. Issue of where the money is coming from. You are seeing higher balances on account. The stimulus between the eip payment, enhanced unemployment, these measures taken by congress and the fed have worked to offset the unfortunate aspects of very high unemployment. So far you are not seeing the dellacqua and sees and things rise delinquencies and things rise, but you are starting to see them level off and come down in our book. We expect chargeoffs as this goes on. The reality is you are not seeing the kind of credit damage you would expect to see with this kind of downdraft inactivity. In activity. The question is what happens next. David you say china may give us some indications. We have seen Industrial Production is coming back, Oil Production as well. On the other hand, the consumer maybe not so much with retail sales. Does that give you concern, here in the United States . Brian the question is how you change behavior. The chinese went into this earlier, locked down earlier, came out of it earlier. We are back to 80 in our offices in china. You are starting to see normalization of activity. The underlying question is what is the activity in restaurants, shopping. You saw an immediate burst of activity, and then it fell back down. That is what we have to watch in the United States. You will see a burst of activity from these people going out doing things. Will that sustain . That is when you need to look more at things like car purchases, house purchases, where they end of overtime. The baseline projection for most people is the economy does not get back to its current size until you get to the end of next year. That is the definition of a recovery. Each quarter from this quarter forward is increased economic activity. What we have to make sure is that despite the very high unemployment, the issues of who is unemployed, the human toll of all of that, the stimulus is upsetting that. You have to see that play out over time. Like you have something 180,000 people working from home, you talk about what you are doing in asia. When do you expect them to come back, and how . Do you expect all of them to come back . Brian we have always have people that worked outside the Standard Office setting. There is a great debate about whether this will change forever the workforce in america and where they want to work. We will see that play out. In the near term, we have been open every day. Have not shut down [indiscernible] which is about 40 of the branches. Everything else has been open. We are beginning to open those branches especially in the states. Ability to operate very well, very much under control. Our team did a fabulous job of putting us in position to have 180 thousand people working from home, so we can operate this way. We have the luxury to go slowly. With all the policies that all the employers want to put in place, the ability to have the luxury to put people back in place carefully, also takes the burden off of those communities we operate in, to not have high levels of infections, people moving around, putting pressure on the community. We have not set any plans yet. We have a top talent team working on the back to work entry. It is not back to work for us but that to the office. David we will hear from jay powell today as part of the cares act, a report on that. What would you like to hear from chair powell today . I think youll hear from secretary mnuchin and chair powell. People have to step back. The ppp Program Still has money left, applications are still coming in. The dollar volume alone is going up but the number of loans is going up faster, so the loans are smaller and smaller. We had done 320,000 as of this morning. 98 of the employers are under 100. Small businesses are getting the help they need. What you want to hear is where is the next round of their ideas to continue to put money into the economy to help . It is not an unlimited resource, so we have to have carefully. The areas that need the most hope are the states because of the incredible budget pressure they have been under. If we dont help them, they will have to make adjustments. Ofpitals, a similar issue shutting down, losing revenue. In some respects, some of the nonprofits, the same issue. Universities. The stimulus has to continue to help americans through the benefits and things like that, but also has to be targeted in the next round. In terms of the work, there is a lot of discussion about facilities, usage. A lot of these facilities were put in place to stabilize. You see massive stabilization in the market. High grade issuance will probably have another record month. High yield will have a strong month. You are starting to see some equity deals get done. Fact that those facilities are not all used is good. That means the market is providing capital. People get focused on how much money is outstanding in a facility, but the private sector and the Banking Sector can drive it. The debate on to be not about whether it is being used. The good news is you are seeing them building the funding structures. David that was bank of america chairman brian moynihan. Time to check on what is going on in the markets. For that, we turn to abigail doolittle. Today, the markets cannot decide where they are going. Abigail fluctuating, the major averages are, between gains and losses. The nasdaq outperforming. The s p and the down mainly lower. This reflects tension that we have seen all year. The best day in about six weeks yesterday, the bulls charging time wills conversation conversation over the weekend saying that they will do what it takes to support the system. Today, the testimony of Jerome Powell and Steven Mnuchin not doing much for the markets. Not a lot of new information coming out but just enough keep those gains in place. Attention i was talking about, we have seen the tension i was talking about, we have seen the tech sector leading, consumer and health care toward the top, but the banks once again getting hammered. That is a cyclical sector. The fact that you have this years rally and the recent rally, not quite as economically strong as you would want, not great. Investors going to bonds. All of this leads to that range that we have been talking about. Bearsr the bulls or the can get out of their way. It will be interesting to see whether the buyers can take charge, since we are at the top of that range. David we had earnings today. Walmart came out with some news to the upside. Abigail they talked about the best growth in two decades, samestore growth up 10 . That stock sharply higher by 7. 6 . Consumer staples down overall, but the thing that happened with walmart, the idea that Consumer Habits could be changing, at least during the shutdown, going more towards staples, stockpiling online. That has helped amazon as well. Walmart performed on that. Whether or not it lasts, is to be seen. David thank you so much for that reporting on the markets. Now we go to Kevin Cirilli in washington. We have been watching this testimony all day. Some of it was political with the democrats and republicans playing a tugofwar about what needs to come next. Two big takeaways as democrats push for another round of economic stimulus. Fed chair jay powell says he will leave that up to congress to decide. There may benaling some need for more economic stimulus. Democrats really want to see that come to fruition in the short term. Republicans say not so fast, embolden by people like Steven Mnuchin as well as administration officials, who say the best way to get the economy back on track, reopened the economy itself. You are seeing that across the country in states that are traditionally governed by republicans, such as when youre seeing in texas, where states are reopening and ready for business. It has been a microcosm of the debate that states at the local level are having to navigate on. The president , for his part, not participating in the hearing but keeping and i on it. Ono, he suggested eye it. Bailing suggested that out states is not something that he could get behind. Thed he clearly wants country [before november, but he also needs the economy going. Opened before november, but he also needs the economy going. First and foremost, yes, absolutely, this will be an economic election. Campaign Officials Say they are willing to draw that contrast. They are willing to take it to battleground states, wisconsin, michigan, where they say we want to reopen the economy, democrats want to keep it shut down. I think youll be hearing more about on assignment benefits, especially with how conservatives will be talking about that on employment benefits, especially with how mentervatives unemploy benefits, especially with how conservatives will be talking about that. Benefitedcampaign has by not having to do back and forth rallies, not having to get out there, and this strategy of doing local media from the basement of where biden is has played to their advantage, but all the attention on trump. Argue that that is a strategy that the Clinton Campaign had in 2016, but the dynamics of this race is still in the fog with the pandemic. Im not sure we have any clarity with how it will play out in the Fourth Quarter in this spring to november. David the question is how do they position themselves so they are not just victims of the virus . Quickly, i would point, there seems to be a consensus that the economic recovery will not really kickstart until next year. David thank you so much. Great to have you with us. Our chief washington correspondent, Kevin Cirilli. The second hour of balance of power over on radio. We will be talking about u. S. China relations with the head of the National Trade council. That is coming up on balance of power on bloomberg radio. This is bloomberg. Vonnie super downgrades in recent weeks until some of the hardest hit companies are pricing billions of dollars of bonds and loans. We will speak with Martin Fridson of lehmann livian fridson advisors. Shares of disney under pressure on the heels of a highprofile departure. Raising concerns about the postpandemic rebound. We will speak to the analyst behind that call, coming up. As the fed pulls