Fed announced massive liquidity injection to ease market strains due to coronavirus outbreak. Up to USD 1.5T will be pumped into the financial system. New York Fed said that the fund will be made available in three tranches of USD 500B, starting with purchases of a broader range of treasury securities.
New York Fed said, “these changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak..
Some analysts noted that the move was basically restarting QE, or at least, a point towards restarting QE. More measures could be announced with the rate decision on March 18 next week. Currently, fed fund futures are pricing in 94.5% of -100 bps rate cut to 0.00-0.25%.
