With coronavirus fears sending the market into a tailspin, the Fed will make an emergency cash infusion
The Federal Reserve has announced that it will inject more than $1.5 trillion in “temporary liquidity” into Wall Street following the market’s worst week since the 2008 financial crisis.
The Fed is making the emergency cash infusion in an attempt to head off a sharper economic contraction, according to a Wall Street Journal report.
“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement Thursday.
With investors spooked over both the COVID-19 outbreak and oil prices, Wall Street has had a rocky week. On Monday, trading was temporarily halted when the Dow plunged nearly 1,900 points moments after the opening bell. On Thursday, the market plunged 5% in premarket trading, triggering yet another temporary halt, according to an NBC News report. Minutes after the opening bell, the S&P plummeted another 7%, triggering the third trading halt of the week. Thursday was the worst day for the Dow since the 1987 market crash, according to NBC News.
The continued tumble is putting pressure on the Fed to intervene in ways not seen since the 2008 meltdown, according to WSJ.
The Fed said that the terms of its emergency relief operations would be “adjusted as needed to foster smooth Treasury market functioning and efficient and effective policy implementation.”
The Fed has already implemented an emergency interest-rate cut in an attempt to stem the COVID-19 outbreak’s economic effects.
