In the wake of House Speaker Pelosi’s obstruction of the nearly $2 trillion stimulus bill, The Federal Reserve is uttering “Once more unto the breach, dear friends!”
Liquidity moves markets!Follow the money. Find the profits!
(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 (aka multifamily), 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.
Under the new programs the Fed will take on a slew of efforts, many aimed at directly aiding employers and households, as well as cities and states.
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.
On the news of QEternity, the US Treasury 10 year yield dropped.
And the Dow mini rose from down almost 500 to down only 103 as of 8:17am.
Let’s see what happens at 9:30am!
Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.