The Fed is pushing into new territory by buying muni bonds and riskier corporate debt. It also released details about its highly anticipated $600 billion Main Street Lending Program.
The Federal Reserve announced on Thursday that it will inject another $2.3 trillion to prop up the American economy through a series of unprecedented emergency initiatives that will extend its reach to small and mid-size businesses as well as state and municipal governments.through the purchase of municipal bonds and expand an existing corporate lending program to include more classes of low-rated and riskier debt.
The Fed also released new details about its highly anticipated Main Street Lending Program, which is aimed at small and mid-sized business that are struggling because of the slowdown and don’t quality for the Small Business Administration’s emergency loans. The central bank will buy up to $600 billion in loans through the Main Street program , which will offer 4-year loans to companies with fewer than 10,000 workers or revenues of less than $2.5 billion.
"Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," Federal Reserve Board Chair Jerome H. Powell said in a."The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.
The Fed announced earlier this week that it will also offer financing to banks making loans through the Paycheck Protection Program, a provision under the federal economic stimulus plan that sets aside $349 billion in rescue loans for small businesses through the SBA."The Fed has launched a mind-boggling number of liquidity initiatives since the start of March and markets are somewhat inured to them at this point.
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