Posted on 03/29/2020 11:53:42 AM PDT by CheshireTheCat
Support for critical market functioning. The Federal Open Market Committee (FOMC) will purchase 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 FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. In addition, the FOMC will include purchases of agency commercial mortgage-backed securities in its agency mortgage-backed security purchases. Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing. The Department of the Treasury, using the Exchange Stabilization Fund (ESF), will provide $30 billion in equity to these facilities. Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds. Establishment of a third facility, the Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets. Facilitating the flow of credit to municipalities by expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit. Facilitating the flow of credit to municipalities by expanding the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper as eligible securities. In addition, the pricing of the facility has been reduced.
(Excerpt) Read more at federalreserve.gov ...
I hope Trump takes that $2Trillion and uses it to build the wall.
Translation:The Federal Reserve will create out of thin air money that the Federal Goverment can borrow for the $2 Trillion Stimulus.
Oh God, watch out. Every time the FED tries to “support the economy” all hell breaks loose.Worst case was their fix in the early 1930’s which turned a stock crash and temporary economic downturn into a full-blown depression.
Please, the FED should be a passive entity that done’t try to “fix things. They’re always about 6 months late anyway because it’s usually takes about 6 months for their action to take effect and by that time you’ve got something else that “needs fixing”. And they’re often wrong about how to “fix” something in the first place. Keep government out of the market economy.
The Federal Open Market Committee (FOMC) will purchase 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.
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Could someone explain to me where the Fed is getting the huge amounts of money required to pay for all this?
Oh wait, I just remembered. It was recently delivered by the Tooth Fairy from somewhere in the Cloud.
Right. IOW, more freaking inflation.
We don’t need illusory trillions of dollars of “stimulus”, what we need is a TAX REFUND (”rebate”) that would put an average of $13,000 in to everyone’s pocket. Follow that with MASSIVE AND PERMANENT TAX CUTS AND CUTS IN THE SIZE OF GOVERNMENT and there’d be dancing in the streets.
Bump for later. I will explain it as best I can.
Every time the Fed takes action it crashes the market
The Fed is again working on a Sunday?
That’s not necessary a bad thing. There are trillions of dollars that people are not spending in the economy right now. The trick is, when people return to work and starts to spend money again, how will the Fed be able to remove trillions of dollars in the economy to prevent hyperinflation?
Sorry to say it but even an economic illiterate should understand that the 2 Trillion is fiat and already spent. We the people get pennies on the dollar and the debt of this will be compounded and put on our children’s future. Just multiply this by the few more “stimulus” there after because it is never enough.
The key word is liquidity.
From cash available for the CARE Act to the bond market to banks reserves.
I thought the key word was survival.
But if the money supply is $2 trillion and half the economy shuts down over an unforeseen meltdown, the Fed can inject another $1 trillion without any inflationary consequence because it is increasing the money supply by $1 trillion to make up for the $1 trillion in lost economic activity.
INFLATION isn’t really the concern here. The Fed is trying to stave off a potential period of DEFLATION.
Would love to know if mortgage rates will drop a point or two trying to better a 4.25 rate
One would think.
I have a HELOC that I kept around just in case.
Now I may have to float some no interest loans to the “kids” to help tide them over. Hopefully the HELOC rate will drop in case I have to use it as the ultimate backstop.
Well, then, if they have the ability to make the economy do well, then they should be doing it all the time, and we’ll all just stay home from work.
Trump wouldn’t need more than one percent of this monstrosity to get the wall built. Probably less than half of a percent.
Conjuring _money_ from nothing. A priest puts more ones and zeros into a computer somewhere. This _money_, detected by other watchful computers, is torn into pieces, flowing each one, to storage areas awaiting therein for dispersal to chosen few... The power of economic life and death.
Everybody gets a onetime payment of 1200 dollars. How much will a cheeseburger cost a month from now? 1200 dollars.
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