The Federal Reserve said that it would extend its emergency lending programs through the end of 2020 as the coronavirus continues to surge across the nation.
Many of the Fed’s nine programs were originally set to expire on or around the end of September. The initiatives are meant to keep credit flowing through the economy by buying corporate bonds, backing up the market for asset-backed securities, and by offering loans to midsize businesses, among other efforts.
“The Board’s lending facilities have provided a critical backstop, stabilizing and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments,” the Fed said in its statement.
The extension will “provide certainty that the facilities will continue to be available to help the economy recover from the COVID-19 pandemic,” it said.
Many of the Fed’s programs are backed by funding from the Treasury Department to protect against credit losses, including money that Congress supplied in its first coronavirus relief package. Seven of the programs were initially set to sunset at the end of September and have now been extended, while two of them already had later expiration dates.
Some of the newly-extended programs, including the “Main Street” program that loans to midsize businesses, have only recently gotten up and running. One, which helps the market for short-term business funding, or commercial paper, extends into March 2021.