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
24 Hour Fitness is preparing for a possible bankruptcy filing even as it begins reopening locations. (Getty)

24 Hour Fitness prepares for potential bankruptcy

24 Hour Fitness prepares for potential bankruptcy
Some U.S. retailers are closing stores in anticipation of potential property damage resulting from the George Floyd protests (Getty)

Retailers consider store closures as protests sweep the country

Retailers consider store closures as protests sweep the country
Lexington Ave. on May 03, 2020 (Credit: Roy Rochlin/Getty Images)

NYC sees second week with no mid-market deals since onset of pandemic

NYC sees second week with no mid-market deals since onset of pandemic
Inside South Florida’s mall, retail and restaurant reopenings

Inside South Florida’s mall, retail and restaurant reopenings

Inside South Florida’s mall, retail and restaurant reopenings
(Illustration by Daniel Castro Maia)

Not your father’s distress: Down market could be opportunity of a lifetime or a big letdown

Not your father’s distress: Down market could be opportunity of a lifetime or a big letdown
A judge allowed Le Pain Quotidien to be released from 59 of its leases. (Getty, iStock)

Le Pain Quotidien freed from 59 leases in bankruptcy

Le Pain Quotidien freed from 59 leases in bankruptcy
The Centers for Disease Control released new guidelines for offices as they reopen amid the coronavirus. (Getty)

CDC recommendations would drastically alter offices

CDC recommendations would drastically alter offices
IBM CEO Arvind Krishnam and 88 University Place (Google  Maps, IBM)

IBM to leave WeWork’s 88 University Place

IBM to leave WeWork’s 88 University Place
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...