Even after the Fed eased some limitations in April to promote emergency lending, the bank has had to make some “tough choices” to heed the $1.95 trillion growth ceiling set by regulators in the aftermath of its phony-accounts scandal.
![“I don’t think … [halting dividends] is appropriate this time,” said Fed Chair Jerome Powell. But his predecessor, Janet Yellen, said holding on to income gives banks a “buffer” to further ”support the credit needs of the economy.”](https://arizent.brightspotcdn.com/dims4/default/7e45f72/2147483647/strip/true/crop/3998x2667+0+0/resize/1024x683!/format/webp/quality/90/?url=https%3A%2F%2Fsource-media-brightspot.s3.us-east-1.amazonaws.com%2F40%2Fb4%2F76873fe44e4599186506d287c6be%2Fpowell-jerome-yellen-bl-041720.jpg)
Large institutions say their strong capital positions allow them to reward investors, and the Fed agrees. But critics say this is the time to be preparing for a sharp downturn and continue helping those hurt by the coronavirus pandemic.
Its prediction that business conditions will remain weak this year — and into next year — stands in stark contrast to forecasts from political leaders that the economy will rebound quickly from the coronavirus pandemic.