Fed Rolls Out $2.3 Trillion Program To Stabilize Economy

Federal Reserve Chair Jerome Powell pauses during a news conference, Tuesday, March 3, 2020, to discuss an announcement from the Federal Open Market Committee, in Washington. In a surprise move, the Federal Reserve cut its benchmark interest rate by a sizable half-percentage point in an effort to support the economy in the face of the spreading coronavirus. Chairman Jerome Powell noted that the coronavirus “poses evolving risks to economic activity."  (AP Photo/Jacquelyn Martin)
ARCHIVO - Foto de archivo, 3 de marzo de 2020, del presidente de la Reserva Federal, Jerome Powell, en conferencia de prensa en Wshington. Powell dijo el jueves 26 de marzo de 2020 que la Fed otorgará préstamos cas... ARCHIVO - Foto de archivo, 3 de marzo de 2020, del presidente de la Reserva Federal, Jerome Powell, en conferencia de prensa en Wshington. Powell dijo el jueves 26 de marzo de 2020 que la Fed otorgará préstamos casi ilimitados para enfrentar los daños causados a la economía por el virus. (AP Foto/Jacquelyn Martin, File) MORE LESS
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April 9, 2020 9:28 a.m.
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WASHINGTON (AP) — The Federal Reserve is taking additional steps to provide up to $2.3 trillion in loans to support the economy. The money will target American households and businesses, as well as local governments besieged by the coronavirus outbreak.

The Fed said Thursday that it is activating a Main Street Business Lending Program authorized by the CARES Act, the largest economic relief package ever passed by Congress.

Federal Reserve Chairman Jerome Powell said the Fed’s role was to “provide as much relief and stability as we can during this period of constrained economic activity.”

In addition, the Fed activated a loan program for municipal governments, as well as additional support for the Paycheck Protection Program, which the Small Business Administration rolled out last week. The program provides loans to businesses with fewer than 500 employees.

The Main Street lending program “will make a significant difference for the 40,000 medium-sized business that employ 35 million Americans,” Treasury Secretary Steven Mnuchin said.

The government’s pay protection plan for small businesses is off to a rocky start. They have had difficulty getting banks to provide the loans. The banks have said that the government has not made clear how they should process such loans, even what forms are required.

The Fed announced the new infusion of cash on the same day the U.S. reported applications for unemployment benefits last week reached a staggering 6.6 million. That means more than one in 10 workers have lost their jobs in just the past three weeks to the coronavirus outbreak.

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