Fed Opens the Floodgates
As signalled earlier this week by Secretary Mnuchin, the Fed opened its windows still wider early this morning, launching facilities it says will add as much as $2.3 trillion of liquidity for what it describes as “Main Street” businesses, state and local governments, and a PPP secondary market.  It has also significantly revised its corporate-loan and TALF facilities.  This report describes each facility in detail, noting changes to the Fed’s initial design (see Client Report COVID6) and the sharp increase in Treasury backstops reflecting the $454 billion allocated for this in the CARES Act (See FSM Report RESCUE72).