US: Financing programs for businesses hit by the coronavirus could amount to $4 trillion, Mnuchin says
The Federal Reserve and Treasury are working on financing programs that could be worth $4 trillion, Treasury Secretary Steven Mnuchin said Sunday. Those liquidity efforts already have begun in the shape of short-term credit facilities for financial institutions and businesses.
Financing programs to help the U.S. economy pull out of the coronavirus crisis could be worth $4 trillion, Treasury Secretary Steven Mnuchin said Sunday.
Part of a bipartisan stimulus effort will include joint efforts between the Treasury and Federal Reserve to get liquidity to businesses that need it, Mnuchin told Fox News Sunday.
The Fed already has launched a variety of programs to keep money flowing through the system, targeting financing for banks and businesses and even moving into municipal bonds, which the central bank will purchase in exchange for financing to banks and other eligible financial institutions.
Some of those programs work through special powers the Fed has been granted and are backstopped with Treasury funding that the Fed can use as leverage to provide even greater funding. For instance, Treasury said it would provide a $10 billion guarantee for short-term business funding that Mnuchin said last week could be used as a backstop for $1 trillion in funding.
In the Sunday interview, Mnuchin said the Fed financing will be targeted across a swath of impacted businesses.
“When this started, this was a bit unique to the airline industry since we had shut down most of airline travel,” he said. “This liquidity facility is a broad-based liquidity facility working with the Fed.”
“We can lever up to $4 trillion to help everything from small business to big business get through the next 90 to 120 days as we win this war,” he added
The liquidity efforts come along with fiscal help that could be worth $2 trillion, according to statements from Mnuchin and Larry Kudlow, the National Economic Council director.