#MacroView: Is The “Debt Chasm” Too Big For The Fed To Fill?
Over the last month, the Federal Reserve, and the Government, have unleashed a torrent of liquidity into the U.S. markets to offset a credit crisis of historic proportions. Here is a list of programs already implemented which have already surpassed all programs during the “Financial Crisis.”
- March 6th – $8.3 billion “emergency spending” package.
- March 12th – Federal Reserve supplies $1.5 trillion in liquidity.
- March 13th – President Trump pledges to reprieve student loan interest payments
- March 13th – President Trump declares a “National Emergency” freeing up $50 billion in funds.
- March 15th – Federal Reserve cuts rates to zero and launches $700 billion in “Q.E.”
- March 17th – Fed launches the Primary Dealer Credit Facility to buy corporate bonds.
- March 18th – Fed creates the Money Market Mutual Fund Liquidity Facility
- March 18th – President Trump signs “coronavirus” relief plan to expand paid leave ($100 billion)
- March 20th – President Trump invokes the Defense Production Act.
- March 23rd – Fed pledges “Unlimited QE” of Treasury, Mortgage, and Corporate Bonds.
- March 23rd – Fed launches two Corporate Credit Facilities:
- A Primary Market Facility (Issuance of new 4-year bonds for businesses.)
- A Secondary Market Facility (Purchase of corporate bonds and corporate bond ETF’s)
- March 23rd – Fed launches the Term Asset-Backed Security Loan Facility (Small Business Loans)
- April 9th – Fed launches several new programs:
- The Paycheck Protection Program Loan Facility (Purchase of $350 billion in SBA Loans)
- A Main Street Business Lending Program ($600 billion in additional Small Business Loans)
- The Municipal Liquidity Facility (Purchase of $500 billion in Municipal Bonds.)
- Expands funding for PMCCF, SMCCF and TALF up to $850 billion.
Here is the Fed’s balance sheet through this past Wednesday (estimated at time of writing)
It is currently expected that over the course of the next several quarters, the Fed’s balance sheet will grow to $10 Trillion in total. Such would be a $6 Trillion expansion from the previous levels.
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