FX.co ★ Powell says that further aid programs to small businesses should not be channeled through the Federal Reserve

Leading US economic policymakers raised the issue of further aid to small businesses yesterday, but Fed Chairman Jerome Powell said that it probably shouldn't be channeled through the central bank.

Stung by criticism that the Fed's Main Street small business lending program has failed, Powell told the House of Representatives Financial Services Committee that there is little demand for loans less than a million dollars.

Thus, if the Congress wants more support for small businesses, programs in the likes of the Paycheck Protection Program should be adopted.

Meanwhile, Treasury Secretary Steven Mnuchin said that he is ready for the Fed to loosen the standards of its Main Street program, allowing loans in the amount of $ 100,000. The current minimum loan for this program is $ 250,000.

"We really do expect losses and we are working closely with the Fed to raise more money through the Main Street program," Mnuchin said. Of the potential $ 600 billion under the program, nearly $ 2 billion has been processed since early June.

Powell also mentioned that the economy has improved a lot, however, further outlook remains uncertain.

Although jobs and household spending has recovered, the United States is still far from its pre-crisis levels.

The deadlock in Congress over next aid programs, including increased unemployment benefits, heightens uncertainty.

In late March, the Congress passed a $ 2.3 trillion aid bill, which authorized a number of lending programs, including the Fed's Main Street lending program.

Lawmakers were concerned about the limited use of these, however, the actions of the Fed has triggered a stock market rally, which helped investors recoup earlier losses.

Nevertheless, the unemployment rate remains still high, and every week, approximately 29 million Americans claim some form of unemployment insurance.