- The Federal Reserve announced on Monday new programs to aid the US economy amid the coronavirus pandemic.
- The programs include unlimited bond buying as well as three facilities to support businesses, consumers, and employers.
- “Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate,” the Fed said in a statement Monday.
- Read more on Business Insider.
The Federal Reserve on Monday announced an array of new programs intended to prop up the US economy, stimulate companies and local governments, and smooth markets and the flow of credit amid the coronavirus outbreak.
“While great uncertainty remains, it has become clear that our economy will face severe disruptions. Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate,” the Fed said in a statement Monday.
The Fed will purchase Treasuries and agency mortgage-backed securities “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” Previously, the Fed had announced that it would buy $US500 billion of Treasury securities and at least $US200 billion of mortgage-backed securities.
To support businesses, consumers, and employers, the Fed will provide up to $US300 billion in new financing, including $US30 billion from the Department of the Treasury, using the Exchange Stabilisation Fund. The Fed will also establish two facilities to support credit to large employers, and a third facility to support the flow of credit to consumers and businesses.
In addition, the Fed expects to soon announce a Main Street Business Lending Program to support lending to eligible small and medium-sized businesses, complementing efforts by the Small Business Administration.
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