While highly technical, the program was a critical piece of the Fed’s response to the financial crisis a decade ago, at its peak in January 2009 providing $350 billion to firms from banks and insurance companies to the financing arms of automakers and other manufacturers.
Analysts said the Fed’s step was a welcome one, but that both the central bank and elected leaders may need to go further against what one deemed the “social distancing recession.” To truly buffer against trouble to come, however, may require more aggressive steps if the estimated 35 million people in the restaurant, entertainment and related industries start to get laid off in large numbers, said David Kelly, chief global strategist at JPMorgan Asset Management.“The question is are authorities doing all that they can to soften the blow of the social distancing recession?,” Kelly said. “I don’t think we’re there yet…There’s going to be a lot of human misery out there.
U.S. retail sale posted their biggest decline in more than a year in February, and the coronavirus pandemic is expected to depress sales in the months ahead. The U.S. central bank has been forced to take several emergency actions over the past two weeks to keep the economy afloat.
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