The Fed continues to water the liquidity markets

The Fed reiterated that it would do anything to help markets continue to function and launched a new $ 300 billion aid program.

US Central Bank No Longer Limits Purchases of T-Bills and Mortgage Securities, She Announced Monday, Along with a Range of Measures Giving a Wide Range of Businesses Access to fresh money.

The Fed will make debt purchases “of an amount necessary to promote the proper functioning of the market and the effective transmission of policies to broader financial conditions and to the economy,” she said in a statement. It has recently resumed massive bond purchases, faced with the economic effects of the new coronavirus epidemic.

The US Federal Reserve also reminded that it would do everything to help markets continue to function and launched a new $ 300 billion aid program to “support the flow of credit to employers, consumers and businesses” .
“Serious upheavals”

The Fed also promised to “soon set up a loan program for small and medium-sized businesses”, which constitute the bulk of the American economic fabric, as well as for local communities. “As great uncertainties persist, it has become clear that our economy will face serious upheavals,” said the Federal Reserve in a statement.

Thus, she stresses, “major efforts must be made towards the public and private sectors to limit the loss of jobs and income and allow a rapid recovery once the disturbances have subsided”.

“These actions will support the flow of credit to local communities and immediately provide liquidity to help consumers and American businesses affected by the coronavirus,” said Treasury Secretary Steven Mnuchin in a statement.

“This is an all-out effort to ensure that businesses can continue to exist even if economic activity temporarily collapses. The Fed is now the direct lender of last resort to the real economy, not just the financial system, “said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Steven Mnichin has also indicated that the economic recovery plan, which the Trump administration is putting in place in the context of bitter discussions with the Democrats, will benefit the workers and does not understand “a plan rescue “for companies like airlines.

The Fed has watered liquidity markets and stepped up support since the new coronavirus epidemic spread to the United States.

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