Federal Reserve Launches Bold Program to Stabilize Markets
by Emmitt Barry, Worthy News Correspondent
(Worthy News) – The Federal Reserve unveiled a host of programs on Monday in order to stabilize the markets in the midst of the coronavirus crisis, which some termed, “quantitative easing to infinity.”
“The Federal Reserve is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time. The coronavirus pandemic is causing tremendous hardship across the United States and around the world. Our nation’s first priority is to care for those afflicted and to limit the further spread of the virus.”
“It has become clear that our economy will face severe disruptions,” the Fed stated today. “Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate.”
The central bank committed to purchasing “treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
The Fed also announced the creation of a “flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing.”
Markets initially responded positively to the news, however, economic analysts warned that the Federal Reserve actions are in essence quantitative easing to infinity.
“We are now in QE infinity, again,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note obtained by CNBC.
Others stated, “this represents the greatest-ever expansion of the Fed’s balance sheet.”
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