Breaking: Fed takes additional actions to provide up to $2.3 trillion in loans to support economy
|The US Federal Reserve announced on Thursday that it has taken additional actions to provide up to $2.3 trillion in loans to support the economy.
Key takeaways from the statement
"Will assist households and employers of all sizes as well as state and local governments."
"Will purchase up to $600 billion in loans through Main Street Lending Program aimed at small and midsize businesses using $75 billion in capital from the US Treasury."
"Expanding primary and secondary corporate credit facilities and term asset-backed loan facilities to $850 billion to increase flow of credit to households and businesses."
"Will help state and local governments manage cash flow through a new municipal liquidity facility to lend up to $500 billion with $35 billion capital contribution from the Treasury."
"Main Street Program will make 4-year loans to companies with under 10,000 workers, $2.5 billion in revenue and in good financial standing before the crisis."
"Principal and interest on Main Street Program will be deferred for 1 year."
"Main Street Lending will be made through banks with the Fed buying up to 95% of the loan."
"Firms obtaining loans must make a 'reasonable effort' at retaining workers and payroll."
"Fed says other restrictions from cares act on dividends, compensation apply to Main Street Program."
"Muni facility will buy up to $500 billion of short term notes directly from US states and DC., US counties with at least 2 million residents and US cities with at least 1 million residents."
"Will keep monitoring muni market to see if more help is needed."
Market reaction
The greenback weakened slightly against its peers on this announcement and the US Dollar Index was last seen erasing 0.17% on the day at 99.99.
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