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Fed will inject $ 1.5 trillion in liquidity to calm markets

US, WASHINGTON (NEWS OBSERVATORY) — The Federal Reserve on Thursday tried to stop the market crash by offering short-term loans worth $ 1.5 trillion, which, according to some analysts, may indicate more aggressive central bank measures in the coming days to stimulate the economy and stabilize the financial system.

The Federal Reserve Bank of New York announced that it will allocate three tranches of $ 500 billion each and will begin to buy a wider range of US Treasury securities than before, signaling that the Fed may begin to use some of its anti-crisis tools earlier than planned.

The next Fed meeting will take place next week, and many analysts now expect the central bank to lower its target rate – very likely to zero – and let the markets know how it plans to deal with the economic consequences of the coronavirus outbreak.

“The Fed is likely to do more in the near future, including lowering rates, probably to zero,” said Ebrahim Rahbari, Citi’s chief currency strategist.

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