U.S. Federal Reserve Rolls Out Series of Measures to Backstop Coronavirus-Struck Economy
The U.S. Federal Reserve Monday introduced an unprecedented array of programs to backstop an economy suffering from sweeping constraints on commerce that experts say are required to curb the coronavirus pandemic and ultimately keep extra people safe.
For the first time, the Federal Reserve will back purchases of corporate bonds, backstop direct loans to firms and “soon” launch a program to get credit to small and medium-sized businesses (SMEs). It further stated it will expand its asset purchases by as much as required to offset financial markets.
The series of actions mark a massive intervention by the U.S. central bank past the financial markets, where it has so far centered its firepower into the real U.S. economic system.
Nonetheless, he stated, without massive fiscal aid, such plans won’t be enough to stem the tide of what economists estimate might be a million jobless claims filed across the nation inside of every week, with more to come.
U.S. shares skidded Monday and gains on U.S. Treasuries plunged after the declaration, as U.S. policymakers struggled to strike an accord on a far-reaching coronavirus stimulus package Monday after falling short on a deal over the weekend.
U.S. corporate credit traders, for their part, lauded the Fed’s step, driving up prices of U.S. investment-grade corporate bond exchange-traded funds.