U.S. Markets

Fed's Main Street loan volume picks up but still modest

(Reuters) - The Federal Reserve facilitated the largest volume of loans yet in the latest week under its new Main Street Lending Program, although the total amount of credit extended by the central bank to U.S. small and midsize business remains modest.

The total balance of outstanding Main Street loans rose by $68 million in the week ended July 29 to $82 million from $14 million a week earlier, according to data released by the Fed on Thursday.

The program, under which the Fed will buy 95% of a loan initiated by a private lender to a qualified business borrower, made its first loan about two weeks ago - $12 million to a company in Wisconsin.

The data was included in the Fed’s weekly detailed account of the assets on its nearly $7 trillion balance sheet, which has mushroomed this year as it rolled out emergency programs to help the economy weather the downturn triggered by the coronavirus pandemic. The U.S. economy shrank at a nearly 33% annualized rate in the second quarter.

Reporting by Dan Burns; Editing by Tom Brown