Fed Unveils Emergency Lending Program

“The Federal Reserve announced Tuesday that it will try to keep credit flowing to households and businesses by buying up commercial paper, short term promissory notes companies use to fund themselves,” the New York Times reports.

“The program, enacted using the Fed’s emergency lending powers, pulls a page from the central bank’s financial crisis playbook. Putting it into action required the signoff of Treasury Secretary Steven Mnuchin and Treasury will provide $10 billion of credit protection to the Fed, using Treasury’s Exchange Stabilization Fund.”

Wall Street Journal: “The Fed can’t lend directly to households and businesses, but it can invoke emergency powers to establish lending facilities that can, in turn, extend credit.”