Federal Reserve Details $2.3T Worth Of Programs To Stabilize Economy
The U.S. Federal Reserve announced new efforts to stabilize the economy Thursday and direct billions to American businesses and governments overwhelmed by the coronavirus crisis.
The Fed's moves include up to $600 billion for its Main Street Lending Program, which is geared toward small and mid-sized businesses affected by the pandemic and its resulting restrictions that have shaken the domestic economy.
"Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," Federal Reserve Board Chairman Jerome Powell said in a statement.
"The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible."
The Fed also revealed other provisions, including $500 billion in loans to states and municipalities, expanded support for primary and secondary corporate debt facilities and the Small Business Administration's Paycheck Protection Program, which provides loans to small businesses so that they can keep workers on the payroll.
The central bank provided detail on its other interventions, including a plan to buy corporate bonds at an investment-grade level. All told, the programs total $2.3 trillion.
Powell said the Main Street program is backed by $75 billion in equity from the U.S. Treasury under the provisions of the Coronavirus Aid, Relief, and Economic Security Act, the $2.2 trillion relief package enacted last month.
The Fed said Main Street loans are for four years and will be offered to companies that employ as many as 10,000 workers, or those with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year.
Companies seeking the Main Street loans must commit to "reasonable efforts to maintain payroll and retain workers" and comply with provisions in the CARES Act that bar executive compensation, stock buybacks and dividend payments.


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