The Fed vowed to support American households and businesses, but it acknowledged “our economy will face severe disruptions.”
Major steps announced include:
- Open-ended quantitative easing (QE). Just over a week ago, the Fed had set a limit of $700 billion on these bond-buying programs
- Fed will start buying commercial mortgage backed securities (CMBS)
- Two lending facilities to large companies: Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance, and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for existing corporate bonds
- Bringing back crisis-era Term Asset-Backed Securities Loan Facility (TALF) to support the flow of credit to consumers and businesses
- Expanding money market mutual fund liquidity facility to include wider range of municipal bonds
- Expanding commercial paper credit facility
And the Fed said it expects soon to launch a Main Street Business Lending Program to support small- and medium-sized businesses.
All of this is part of the Fed’s efforts to prevent a major credit crisis.