US Federal Reserve to pump trillions of dollars into the financial system to fight coronavirus slowdown
The US Federal Reserve has announced it will pump trillions of dollars into the financial system
The US Federal Reserve has announced it will pump trillions of dollars into the financial system in its latest bid to stave off a coronavirus slowdown.
The central bank stepped in to support financial markets for the third time this week, saying its move to inject more than $1.5 trillion of temporary liquidity was designed to prevent ‘highly unusual disruptions’.
Much of the measures will focus on the short-term funding markets that banks use to operate.
The New York Fed said yesterday it would offer a least $500billion of three-month loans beginning immediately, and another $500billion of three-month loans today.
It will also offer a third $500billion tranche of one-month loans today along with other stimulus measures.
In a statement, the New York Fed said: ‘These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.’
It comes after the Fed cut interest rates by half a percentage point last week to a range of 1 per cent to 1.25 per cent.
Other central banks including the Bank of England, the Bank of Japan and the Bank of Canada have followed suit.