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Fed seeks to stabilize credit markets

Federal Reserve Chairman Jerome Powell (Credit: Bloomberg)

The Central Bank unveiled a new generation of lending facilities to prevent a liquidity crunch from turning into a solvency crisis for large and small American businesses. These actions take the central bank well past the playbook it used in 2008, when it was focused primarily on preventing financial institutions from failing, WSJ noted.

  • Worth Noting: The current situation is different and in some respects more dire than in 2008 because of the hard stop to economic activity across the country.
  • Unlimited QE: The Fed said that the purchases of Treasury and mortgage securities that it approved one week ago are essentially unlimited and that it would buy $375 billion in Treasury securities and $250 billion in mortgage securities this week.

Here are the extensive new measures announced by the Fed earlier this week. 

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