New York (CNN Business)The New York Federal Reserve is taking out the big guns to calm panicky financial markets. The NY Fed announced plans Thursday to inject vast amounts of money into the financial system, totaling at least $1.5 trillion. And the Fed promised to start purchasing a range of Treasuries — a step that effectively marks a return to the 2008 crisis-era bond buying program known as quantitative easing, or QE. The Fed said the dramatic moves will address “highly unusual disruptions” in the Treasury market linked to the coronavirus outbreak. This accelerates weeklong efforts by the NY Fed aimed at easing fears that companies will lose access to capital or that markets will become unhinged. “The Fed is all in. They’ve fired their nuclear weapon. and they did it because financial markets are seizing up,” said James Bianco, president of Bianco Research. “There is no liquidity in the markets. They are trying to unstick them.” Not only did US stocks nosedive Thursday, but the ultra-safe government bond market malfunctioned. Even though Treasuries are supposed to be the safest assets on the planet, liquidity dried up in that market, setting off alarm bells on Wall Street. Read More “The… Read full this story
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