The Federal Reserve (US Central Bank) said they will set up three new lending facilities that will save up to $300 billion by buying corporate bonds, buying a wider range of municipal bonds, and buying asset-backed securities.
The new announced measures came in the wake of the latest attempts by the Fed to it is alleviate the severe turmoil stemming from the repercussions of the Coronavirus outbreak.
They also announced that they would lend to companies and local governments as well as expand bond-buying programs.
The Fed will also buy an unlimited amount of Treasury bonds and mortgage-backed securities in an effort to lower interest rates and ensure that these markets operate smoothly.
The Fed announced unlimited bond purchases in an unprecedented move to help the U.S. economy cope with the collapse caused by the Corona outbreak.
This is considered an extraordinary step, as it does not actually place any restrictions on the assets the Federal Reserve wishes to purchase.
The Federal Reserve has also taken bold measures to ensure that businesses, cities and families have access to credit, so that they are “better able to maintain business operations and capacity” during the coronavirus pandemic.
In addition, the Fed mentioned it will soon announce “a Main Street Business Lending Program,” which would support lending to eligible small-and-medium sized businesses.
Meanwhile, the dollar index, which measures the performance of six major currencies against the US dollar, slumped by 0.94 percent at 102.47.
Dow futures sharply
jump more than 600 points after Fed unveils massive open-ended asset purchase
program, currently 1.23% up at 19,410.50 points, after hitting a limit down of
5% earlier today.