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NYTimes: Fed Programs Could Inject $2.3 Trillion Into the Economy

The Federal Reserve will take measures “far beyond anything it attempted in the 2008 financial crisis.”

The Federal Reserve announced on Thursday that it aims to inject $2.3 trillion into the economy through new and expanded relief programs.

According to the New York Times, the Fed will attempt to jolt the economy by purchasing municipal bonds and expanding “corporate bond-buying programs to include some riskier debt.” The Fed will also introduce a new lending program that will target mid-size companies not eligible for the Small Business Administration loan program.

The measures push the Fed far beyond anything it attempted in the 2008 financial crisis, and expand its already significant efforts to cushion the economy and calm markets, which have included money market interventions and an unlimited bond-buying campaign. The Fed had previously rolled out about $500 billion worth of emergency lending programs, so this could more than quadruple the size of its push.

This new round of relief funding is designed to provide more immediate support than previous packages, which rolled out slowly after millions of workers had already been laid off.

While some of their newly-announced programs urge or incentivize companies to maintain their payroll, they are just getting up and running and coming too late for many workers. The most recent economic rescue bill signed into law by President Trump included a new cushion for laid-off workers, in the form of more generous unemployment benefits.


The Fed’s goal is to make sure the ongoing hit to the labor market and the broader economy does not prove long-lived. The emergency programs are intended to get credit flowing to companies and governments that might struggle to access funding as uncertainty roils markets, helping them to make it through. Congress gave the Treasury Department $454 billion to back up the Fed’s efforts, which need to be insured against losses, giving officials room to scale them up dramatically.

About that “riskier debt”:

The Fed’s moves on Thursday make use of that funding to push the central bank’s emergency lending powers into uncharted territory. Officials had avoided buying municipal debt and lower-rated company debt, out of concern about credit risk and to avoid picking winners and losers. But amid market disruptions, calls for Fed action in both areas have been building.

The Times is also reporting today that jobless claims over the past three weeks now exceed 16 million.

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