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Jerome H. Powell, the Federal Reserve chair, will tell lawmakers on Tuesday that the U.S. economy is bouncing back, but the path ahead remains dependent on the virus and the action of policymakers.
“We have entered an important new phase and have done so sooner than expected,” Mr. Powell said in remarks prepared for delivery to the House Financial Services Committee. He will note that consumer spending rebounded “strongly,” but will warn that the outlook is “extraordinarily uncertain” and hinges on whether efforts to contain the coronavirus pandemic succeed.
“The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed,” Mr. Powell will say.
The Fed has worked to shore up markets and the economy as the pandemic tossed millions out of work and starved businesses of revenue, including by cutting interest rates to near-zero, buying huge quantities of government-backed debt and rolling out a series of emergency lending programs.
Mr. Powell’s testimony on Tuesday is meant to focus on those emergency efforts, which are backed by funding Congress earmarked as part of its coronavirus economic response package. Mr. Powell will describe the programs, most of which have seen fairly limited uptake as financial conditions have calmed, and as the private market or other government programs have met credit demand.
One notable exception is the Fed’s Paycheck Protection Program loan facility, which takes the government’s small-business loans off bank balance sheets to give the institutions room to continue lending. That program holds about $65 billion in outstanding loans, he will say, a sign that banks and other lenders have made use of the facility. — Jeanna Smialek
Uber has made a takeover offer to buy Postmates, the upstart delivery service, according to three people familiar with the matter, as the on-demand food delivery market consolidates and Uber looks for new ways to make money.
The two companies could reach a deal as early as Monday evening, according to the people, who spoke on the condition of anonymity because they were not authorized to do so publicly. The talks are still going on, the people cautioned, and any potential for a deal could fall apart.
Representatives of Uber and Postmates declined to comment on any potential deal talks.
Uber held merger talks this year with GrubHub, a food delivery competitor. But those talks fell apart after the two companies could not come to agreement on a price, two people familiar with the matter said. GrubHub was eventually bought by Just Eats, a European food delivery service, for $7.3 billion in June.
Shortly after the GrubHub deal fell through, Uber began to piece together a potential offer for Postmates, one of the few stand-alone American companies in food delivery.
Postmates also held sale talks with DoorDash and GrubHub over the last year, according to two people with knowledge of the situation, who declined to be identified because the talks were private. — Mike Isaac and Erin Griffith
Wells Fargo said its shareholders will get a smaller dividend from the company in the third quarter after the Federal Reserve told the bank it had to hang on to additional capital to protect itself from uncertainties caused by the coronavirus pandemic.