The US Federal Reserve (Fed) will inject an additional $ 1.5 trillion this week into the money market, which has helped Wall Street significantly reduce losses from a dark session.
The Fed will offer this Thursday 500 billion dollars with three months maturity and will offer Friday 500 billion to three months and 500 billion to one month. It will inject 500 billion a week every three months and 500 billion a month until April 13.
These announcements allowed the New York Stock Exchange to erase part of its losses in mid-session. Around 5:10 p.m. GMT, the Dow Jones, which fell by more than 9% in session, was down 4.71%, while the Nasdaq, with strong technological coloring, lost 4.45%.
The central bank will also continue to supply the market with cash, until April 13, at least $ 175 billion each day, with repayment the next day, and, twice a week, at least $ 45 billion when due two weeks. This money made available by the Fed allows banks and large companies to refinance themselves.
The powerful US central bank said in the statement that “these changes are expected to respond to very unusual disruptions in the secondary treasury bill markets associated with the coronavirus outbreak” The Fed will also buy different types of securities with different maturities and purchases will continue in the second quarter.
Faced with the pandemic of the new coronavirus, and its effects on the economy, the Fed has already, twice this week, increased its daily injections in the money market, increasing them from $ 100 billion to $ 175 billion.
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