A new $2.3 trillion Fed plan to aid localities and companies

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FILE - In this March 25, 2020 file photo, a closed sign hangs in the window of a shop in Portsmouth, N.H., due to caronavirus concerns. The Federal Reserve is taking additional steps to provide up to $2.3 trillion in loans to suport American households and businesses as well as local governments as they deal with the coronavirus. The Fed said Thursday, April 9, among the actions it is taking is the activation of a Main Street Lending Program that was authorized by the $2.3 trillion economic relief bill pass by Congress last month. (AP Photo/Charles Krupa, File)

WASHINGTON – The Federal Reserve unleashed a new series of moves Thursday to try to make loans available to states, localities and companies that have been hard hit by the coronavirus.

In doing so, the Fed will pump an additional $2.3 trillion into the U.S. economy. The central bank, in part, is drawing on money made available in Congress' new economic relief package to buy municipal bonds as well as debt that did not previously qualify for federal backing.

The extraordinary rescue package comes on top of efforts the Fed has already made to bolster the economy, including cutting its benchmark interest rate to near zero and supplying more than $1 trillion to purchase Treasury and mortgage-backed securities to help keep credit flowing.

On the same day that the number of Americans seeking unemployment benefits reached 16.8 million in just the past three weeks, Chairman Jerome Powell said the Fed fully intended to use its powers “forcefully, proactively and aggressively until we are confident that we are solidly on the road to recovery.”

On Wall Street, the Dow jumped 300 points after the Fed action.

Powell said there was “every reason to believe that the economic rebound, when it comes, can be robust” because the economy was doing well before the virus hit.

The Fed said it was activating a Main Street Lending Program authorized by the CARES Act, the largest economic relief package ever passed by Congress.

Powell said there was “every reason to believe that the economic rebound, when it comes, can be robust” because the economy was doing well before the virus hit.