Fed to buy unlimited Treasurys to support coronavirus-hit financial markets

Capital Markets • March 23, 2020, 8:28AM EDT
UPDATED: March 23, 2020, 9:02AM EDT
The Block

The U.S. Federal Reserve has said that it would buy as many Treasury and mortgage-backed securities as needed to support the coronavirus-hit financial markets.

“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,” said the central bank in a Monday morning statement.

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The Fed previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.

Both crypto and traditional financial markets appear to have reacted positively to the news. Bitcoin is currently trading at around $6,300, up around 5% in the past 24 hours. S&P 500 Futures, on the other hand, are up by about 2% at 2,355 in intraday.

The Fed will support “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.” It will be backed by $30 billion from the Treasury’s Exchange Stabilization Fund.

The Fed also said it “expects to announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small and medium-sized businesses, complementing efforts” by the Small Business Administration.

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.