Fed plans major commercial mortgage buyback

Central bank said its Treasury and mortgage security purchases from a week ago are basically unlimited

TRD NATIONAL /
Mar.March 23, 2020 09:21 AM
US Federal Reserve Chairman Jerome Powell (Credit: ERIC BARADAT/AFP via Getty Images)

US Federal Reserve Chairman Jerome Powell (Credit: ERIC BARADAT/AFP via Getty Images)

The Federal Reserve dramatically expanded its lending programs meant to unclog credit on Monday by expanding its facilities to include different types of municipal and corporate debt.

The Federal Open Market Committee said the Treasury and mortgage security purchases it approved a week ago are basically unlimited, according to the Wall Street Journal. It plans to buy $375 billion worth of Treasury securities and $250 billion worth of mortgage securities this week. It will also start buying commercial mortgage-backed securities that were issued by government-supported entities.

The Fed has been buying up mortgage-backed securities since the last recession to ensure that banks are able to provide financing to borrowers. The Fed’s purchase of mortgages allows banks to continue to originate new ones.

The Fed will also launch a trio of new lending facilities, including the Term Asset-Backed Securities Lending Facility. The central bank previously used this in 2008 to support business credit and consumer markets.

Another facility will lend to investment-grade companies, and the third will buy corporate bonds issued by highly rated companies in the corporate bond market. All three are meant to support $300 billion in new financing.

The Fed plans to soon unveil a Main Street Business Lending Program to support small and midsize businesses. [WSJ] — Eddie Small


Related Articles

arrow_forward_ios
(Credit: iStock)

“Kicking the can down the road”: Real estate industry says $2T relief plan doesn’t do enough

(Credit: iStock)

EB-5 is back in the doghouse

Gary Barnett, Central Park Tower, and the Tel Aviv Stock Exchange Bull (Credit: Wikipedia, iStock)

Extell’s Israeli bonds put on downgrade watch

From left: Ace Watanasuparp, Mark Favaloro and Alan Rosenbaum

Watch tonight: (Work from) home lending on TRD Talks Live

San Francisco’s Oceanwide Center has a new buyer

San Francisco’s Oceanwide Center has a new buyer

Macy’s in Herald Square and CEO Jeff Gennette (Credit: Google Maps, D Dipasupil/FilmMagic)

Macy’s announces furloughs for “majority” of its workers

Almost 50,000 retail stores have closed across the country, and the restaurant industry has lost $25 billion in sales since March 1, (Credit: Getty Images)

US will see $20B in retail loans come due starting this week

Durable Capital's Henry Ellenbogen and Redfin CEO Glenn Kelman (Credit: Ellenbogen by Paul Morigi/Getty Images for The Phillips Collection; Redfin)

Redfin sells $110M stake to VC firm

arrow_forward_ios
Loading...