Federal Reserve Chairman Jerome Powell made a rare appearance on national TV Thursday morning, telling NBC’s “Today” that the central bank still has plenty of tools left to support a U.S. economy that may already be in recession amid the novel coronavirus pandemic.

“When it comes to this lending we’re not going to run out of ammunition, that doesn’t happen,” Powell said.

With the Fed already having slashed interest rates to zero, Powell said the primary tool to combat the economic effects of the novel coronavirus is now its lending facilities. Over the past few weeks, the Fed has launched a number of emergency lending operations designed to backstop the U.S. Treasury, U.S. dollar, corporate debt, and municipal bond markets.

Powell said the Fed’s ability to provide those emergency loans is only limited by the funding provided by the U.S. Treasury and the central bank’s ability to take losses on those loans.

“We can continue to make loans and the point of all of that is to support the flow of credit in the economy to households and businesses,” Powell said.

Speaking to “Today,” Powell said the U.S. economy is in an unusual situation.

“We may well be in a recession,” Powell said. “But I would point to the difference between this and a normal recession. There is not anything fundamentally wrong with our economy. Quite the contrary. We are starting from a very strong position.”

Loans for Main Street

The full text of the Senate bill slated for approval this week includes $454 billion of funding for Fed programs approved by the U.S. Treasury. Powell says each dollar of funding from the U.S. Treasury can support about $10 of lending in the economy, meaning that the funding could support over $4 trillion in loans.

“The help from the Fed will be when the economy begins to rebound,” Powell said. “Then we will be there to make sure that rebound is as strong as possible."

The Senate bill proposes a Main Street lending program that would provide funding to banks that make direct loans with no higher than 2% interest to eligible small to medium-sized businesses. Companies will be able to take on the loan if they employ between 500 to 10,000 employees, do not pay dividends or buys back shares while the loan is outstanding, and retain at least 90% of their workforce through September 30.

The Fed had telegraphed its intention to set up such a program earlier this week, when it also amplified the scale of its quantitative easing program, which purchases assets in the open market.

Powell’s appearance on the “Today” show was just over an hour before the U.S. was set to publish new figures on weekly jobless claims, which are expected to smash records as businesses across the country closed down.

Powell said the American people should see some “relief and stability” as a result of the pending legislation.

“The Federal Reserve is working hard to support you now and our policies will be very important when the recovery does come,” Powell said.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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