Breaking: Fed announces new 'aggressive action to confront disruptions' DXY drops below 102

Eren Sengezer FXStreet

The Federal Reserve has announced that it rolled an extensive range of new programs for companies, households and small businesses in a so-called 'aggressive action to confront severe disruptions.'

With the initial reaction, the US Dollar Index started to erase its daily gains and was last seen at 102, where it was unchanged on the day.

Key takeaways

"Will buy treasuries and mortgage-backed securities in the amounts needed to ensure smooth market functioning and transmission of monetary policy."

"Using full range of authority expanding bond purchases to include agency commercial MBS as well as $300 billion new credit programs for employers, consumers and businesses."

"Establishing 2 facilities for large employers."

"One facility for new bond and loan issuance and one for secondary market facility for outstanding corporate bonds."

"Establishing term asset-backed loan facility backed by student, auto, credit card and SBA-backed loans among other assets."

"Widening money market mutual fund facility to include variable-rate demand notes and bank certificates of deposit."

"Also expanding commercial paper funding facility to support local govt by including high-quality tax-exempt cp and reducing pricing on facility."

"In coordination with US Treasury, the corporate bond facility to make loans of up to 4 years to investment grade companies."

"Will soon announce main street business lending program to support lending to eligible small and medium businesses, complementing efforts by the SBA."

"Will purchase $75 billion of treasuries and $50 bln of agency MBS each day this week."

"Daily and term repo rates to be reset to offering rate of 0.0%."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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