Fed unveils aggressive measures to shore up economy

The Federal Reserve announced a broad slate of programs to make sure credit flows to businesses and consumers as coronavirus safety measures cripple the economy.

Why it matters: The Fed’s announcement early Monday is the most aggressive step so far this year — and the markets responded in kind, with futures rising steeply ahead of the market's open.

Details: The Fed said its previously announced plan to purchase treasury and mortgage-backed securities — a program called quantitative easing — would be unlimited.

• For the first time, the Fed will dip its toes into the corporate bond market by contributing to a lending facility that will be used to buy corporate bonds issued by highly rated companies.
• The measures go beyond those used during the 2008 financial crisis.

The Fed also expanded its buying to include government-backed commercial real estate debt.

• It will lend to investors who want to purchase se­cu­ri­ties backed by consumer debt, including auto and credit card loans.
• In coming days, the Fed said, it will launch a program directly aimed at Main Street — to support loans to small businesses.

The state of play: Last night, amid President Trump's news conference about the status of efforts to fight COVID-19, stock futures plunged the most allowed. While the losses faded overnight, futures turned positive after the Fed’s announcement.

• The Fed says the programs will provide $300 billion in new financing.
• Treasury Secretary Steven Mnuchin told CNBC Monday morning that Congress was "very close" to passing a stimulus package.

What they’re saying: “Ag­gres­sive ef­forts must be taken across the pub­lic and pri­vate sec­tors to limit the losses to jobs and in­comes and to pro­mote a swift re­cov­ery once the dis­rup­tions abate,” the central bank said in a statement.