The Federal Reserve announced several new lending programs Thursday, designed to pump an additional $2.3 trillion into a U.S. economy that’s been severely battered by the coronavirus pandemic.
“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,” Fed Chairman Jerome Powell said in a statement, describing the extraordinary moves.
“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,” he added.
The announcement of the program came on the same day the Labor Department reported another 6.6 million Americans filed for unemployment last week. Over the last three weeks, nearly 17 million people have filed initial jobless claims as businesses across the country kept their doors closed in an effort to slow the spread of the pandemic.
The Main Street program will finance four-year loans to businesses with up to 10,000 employees. Principal and interest payments will be deferred for a year. The loans will be issued through regular banks, which will retain 5% of the loans while the central bank buys the remainder.
In addition, the Fed says it will lend $500 billion to struggling state and local governments, and will broaden some of its earlier lending programs to help big corporations.