GOVERNMENT & CENTRAL BANKS
Where to begin is an enormously complex
question. Big industry and small business are
looking at a complete, or nearly complete halt
to operations. Restaurants that have been
shuttered employ hundreds of thousands of
people. Airlines are grounding flights, meaning
no crews are needed. The dilemma afflicts every
sector of the national and global economy.
The risk of frozen economic activity will ripple
outward, from the banking and mortgage
industry, to services ranging from dog walking
to doctors visits.
The U.S. Federal Reserve created a lending
facility to buy short-term loans from banks and
companies to ease the flow of credit as the
economy grinds to a halt. The Fed announced
that it’s reviving a program it first used during
the 2008 financial crisis to unclog a short-
term lending market for what is known as
“commercial paper.” Large businesses issue
commercial paper to raise cash to meet payrolls
and cover other short-term costs. Borrowing
rates in the commercial paper market have
been spiking as more companies have sought
to raise cash in the expectation that their
revenue will plunge.
The White House is proposing a roughly $850
billion emergency economic rescue package
for businesses and taxpayers. Treasury Secretary
Steven Mnuchin will outline the package to
Senate Republicans at a private lunch, with
officials aiming to have Congress approve it this
week. It provide relief for small businesses and
the airline industry and include a massive tax
cut for wage-earners. Two people familiar with
the request described it to The Associated Press