Federal Reserve Announces Extensive Actions to Support the Economy
On March 23, 2020, the Federal Reserve announced several new measures to support households, smaller and larger businesses, and to enhance overall market functioning and credit provision to the broader economy. The actions include an announcement by the Federal Open Market Committee (“FOMC”) that it will increase open market operations, including the purchase of Treasury securities and agency mortgage-backed securities (“MBS”), and the announced establishment of several new liquidity programs pursuant to the Federal Reserve’s emergency lending authority under section 13(3) of the Federal Reserve Act. Taken together, the new facilities will provide up to $300 billion in new financing. The Treasury Department, using the Exchange Stabilization Fund (“ESF”), will provide $30 billion in equity to backstop these facilities.