The Federal Reserve announced a series of stimulus measures of up to 2.3 trillion USD to provide financing support to SMEs and local governments suffering from coronavirus pandemics. According to this;
· With the Municipal Liquidity Facility, short-term bonds from the states will be purchased directly and 500 billion USD will be provided.
· A loan flow of approximately 600 billion USD will be provided to SMEs through the Main Street Crediting program.
· The size and scope of the Primary and Secondary Market Corporate Credit Facilities and the Futures-Based Securities Credit Facility will be expanded to provide 850 billion USD in loans.
· Launching the Paycheck Protection Program Liquidity Facility, “Liquidity will be provided to participating financial institutions through term financing provided by PPP loans to small businesses.
Steps taken are planned to meet liquidity needs to protect local governments and SMEs that have financial problems. Also, The Fed's plan in this context will be the purchasing of some of the corporate notes with “junk” rating, as I understand here, the companies whose ratings have been recently downgraded to the “junk”, which is damaged due to a pandemic, will be the subject of this. Priority in the economy, saving firms and preventing unemployment from growing… The job market data announced in the USA for the first period of the pandemic and unemployment applications, which is a more flash data, show that the impact on firms and employment may be greater than expected
Kaynak: Tera Menkul
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