Stocks fell on Monday; Federal Reserve Chair Jerome Powell pledges all recovery aid possible; and stimulus package talks will likely continue to stall. Here's how the headlines could affect your money.
The Dow fell more than 500 points, or 1.8%, on Monday, while the S&P fell 1.2% and the Nasdaq just 0.1%. Traders are trying to gauge the continuing impact of the coronavirus pandemic and look for signs of a future stimulus package from Congress.
In a prepared speech to the House Financial Services Committee on Tuesday, Federal Reserve Chair Jerome Powell pledged the central bank's commitment "to using our tools to do what we can" to aid the U.S. economic recovery "for as long as it takes."
So far, the Fed has slashed benchmark interest rates to near zero, launched 13 lending and liquidity programs to help small businesses and provide them with credit, and has said it will let inflation rise above 2%.
Video by Stephen Parkhurst
The Federal Reserve has more than $2 trillion available for economic aid, though much of it hasn't been used yet. Its programs can lend money to small businesses, for example, and the bank can buy corporate bonds on the market.
President Trump has vowed to nominate and get a replacement confirmed by Election Day (November 3), and Senate Majority Leader Mitch McConnell has vowed to put the nominee to a vote by the end of this year. Both Democrats and Republicans are now focused on preparing for the process.
The liquidity of an organization refers to its cash reserves or assets that can be sold easily without having drastic effects on operations. The Federal Reserve supplied liquidity to financial institutions participating in the Paycheck Protection Program to ensure small businesses across the country had access to financial aid.
More from Grow: