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03-20-20-NATIONAL-Feds Lending-apphoto-1 — Federal Reserve Chair Jerome Powell speaks during a news conference, Tuesday, March 3, 2020, to discuss an announcement from the Federal Open Market Committee, in Washington. In a surprise move, the Federal Reserve cut its benchmark interest rate by a sizable half-percentage point in an effort to support the economy in the face of the spreading coronavirus. Chairman Jerome Powell noted that the coronavirus "poses evolving risks to economic activity." (AP Photo/Jacquelyn Martin)

Fed to try to ease flow of credit with new lending facility

March 17, 2020

CHRISTOPHER RUGABER AP Economics Writer WASHINGTON (AP) — In its latest emergency action, the Federal Reserve is establishing a lending facility to try to ease the flow of short-term credit to banks and businesses as the economy grinds to a halt from the viral outbreak. The Fed announced Tuesday that it's reviving a program it first used during the 2008 financial crisis to unclog a short-term lending market for what is known as "commercial paper." Large businesses issue commercial paper to raise cash to meet payrolls and cover other short-term costs. "An improved commercial paper market will enhance the ability of businesses to maintain employment and investment as the nation deals with the coronavirus outbreak," the Fed said in a statement. Borrowing rates in the commercial paper

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Fed to try to ease flow of credit with new lending facility

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