The Federal Reserve announced unlimited aid to recover the United States economy

[Inkriql]

The United States Federal Reserve warned on Monday of "severe shocks" in the economy due to the coronavirus, announcing $ 300 billion to "support the flow of credit to employers, consumers and businesses." He announced that he would buy as much government-backed debt as necessary to calm distressed markets, and he rolled out a series of programs aimed at propping up both big and small businesses, an effort of whatever it takes to buffer brutality.

This is the second massive wave of initiatives to support a closed US economy, including the purchase of an unlimited amount of bonds to keep borrowing costs down and the creation of programs to guarantee credit flows to corporations and state governments. and local.

The Fed will purchase Treasury bills and mortgage-backed securities from agencies "in amounts necessary to support the smooth operation of the market and the effective transmission of monetary policy to broader financial conditions and the economy," and will also purchase mortgage-backed securities. agency commercials, according to a statement.

Under the new programs, the Federal Reserve will make a great deal of effort, many of them aimed directly at helping employers and households, as well as cities and states. He added that he will soon disclose a program to give direct credits to small and medium-sized companies, which have suffered a severe blow and even the closure as the government tries to stop the virus from advancing.

"As long as great uncertainty persists, it has become clear that our economy will face severe shocks," the Fed said in a statement.

"Aggressive efforts must be made in both the public and private sectors to limit job and income losses as well as to promote a rapid recovery once the shocks subside," the US central bank added.

The United States Monetary Agency will support "the flow of credit to employers, consumers and businesses by establishing new programs that together will provide up to $ 300 billion in new financing." It will be backed by $ 30 billion from the Treasury Exchange Stabilization Fund.

The Fed also "hopes to announce soon the establishment of a Main Street business loan program to support loans to eligible small and medium businesses, complementing the efforts" of the Small Business Administration.

The Federal Reserve has watered cash markets and increased support since the coronavirus spread to the United States. The measures announced include support for recent student loans, auto loans, and credit card debt, as well as small business loans. In this framework, the monetary entity promised "to continue using a wide range of tools to support the flow of credit ´for households and companies".

Four key points

- Two more programs were created to support large employers: a primary market corporate credit service for the issuance of new bonds and loans, and a secondary market corporate credit service to provide liquidity for outstanding corporate bonds.

- Another program, a term asset-backed securities loan service, “will allow the issuance of asset-backed securities backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration and certain other assets".

- The US central bank also said it would expand the Liquidity Facility of the Money Market Mutual Investment Fund to include a broader range of securities, including variable rate municipal demand notes, a step intended to help states and cities. .

- Finally, the Fed said it would expand the existing Commercial Paper Financing Service to also include high-quality municipal debt, another measure to help states and cities with liquidity problems.