Federal Reserve: “Unlimited QE”
March 23rd, 2020Via: Bloomberg:
The Federal Reserve on Monday announced a massive second wave of initiatives to support a shuttered U.S. economy, including buying an unlimited amount of bonds to keep borrowing costs low and setting up programs to ensure credit flows to corporations and state and local governments.
The Fed will buy Treasuries 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,” and will also buy agency commercial mortgage-backed securities, according to a statement. The Fed had said a week ago it would buy at least $500 billion of Treasuries and $200 billion of agency MBS.
The rate on 10-year Treasuries plunged following the announcement, flattening the yield curve, while the dollar dropped and U.S. stock futures pared their earlier losses.
