Middle-Market Public Policy Roundup

We’re changing up the format for this week’s roundup to provide a wider range of sources and analysis. In this edition, we look at the Federal Reserve’s decision to keep interest rates at near-zero levels. We also summarize a Senate vote last week that blocked a slimmed-down stimulus package, and a Securities and Exchange Commission committee meeting that focused on private equity. 

Fed Signals Interest Rates to Stay Near Zero Through ​2023 

• The Federal Reserve’s policymaking body agreed to keep interest rates at their near-zero level after it met on Wednesday. [The Wall Street Journal / Nick Timiraos]
• It’s the first time the Federal Open Market Committee has voted on the federal funds rate since it made a major policy shift earlier this month that is expected to keep rates at their current level for the foreseeable future.
• Quarterly projections released with the Fed’s statement indicated that the central bank does not expect interest rates to increase through 2023 in an effort to shrink unemployment and support economic growth.
• The stock market rallied in the wake of the Fed’s decision and quarterly projections, but keeping interest rates low in the long run could be beneficial for private companies as well. With debt easier to finance, the decision is likely to encourage M&A activity.
• Two FOMC members voted against the proposal, breaking months-long unanimity.

‘Skinny Stimulus’ Blocked in Senate

• The Senate blocked a whittled-down $300 billion coronavirus aid package from advancing on Sept. 10. [The Wall Street Journal / Andrew Duehren and Kristina Peterson]
• Despite a plurality of seats, Republicans failed to get the plan across the floor in the 52-47 vote.
• Plans from Republicans and Democrats included aid packages between $1 trillion and $2 trillion.
• With fewer than two months until the election, the odds for a massive stimulus compromise have fallen practically to zero. [CNN / Lauren Fox and Phil Mattingly]
• However, House Majority Leader Nancy Pelosi, D-Calif., said the House should remain in session until a new deal is reached. [The Wall Street Journal / Natalie Andrews and Kristina Peterson]
• Lawmakers and the White House were close to a deal in August before President Trump pulled out of negotiations and implemented his own executive directives.

SEC Holds Panel Focused on Private Equity

• The Securities and Exchange Commission’s Private Investments Subcommittee, an auxiliary body to the Asset Management Advisory Committee, met Wednesday to discuss private equity investment.
• Topics included academic literature on the potential benefits of private equity investments, and analysis provided by Cambridge Associates and Hamilton Lane.
• A recording of the meeting can be found here.