Fed rolls out $2.3 trillion to backstop 'Main Street,' local governments

The US Federal Reserve on Thursday rolled out a broad, $2.3 trillion effort to bolster local governments and small and mid-sized businesses in its latest move to keep the US economy intact as the country battles the coronavirus pandemic.

The Fed said it would work through banks to offer four-year loans to companies of up to 10,000 employees, and begin to directly lend to state governments and more populous counties and cities to help them respond to the crisis.

In announcing what may prove to be the Fed's most groundbreaking steps yet in the battle against the coronavirus, Fed Chair Jerome Powell said the central bank's role had now broadened beyond its usual focus on keeping markets "liquid" and functional, to helping the United States get the economic and financial space it needs to fix a dire health emergency.

"Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," Powell said in a statement released on Thursday. "The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible."

Though many of the programs are due to remain open only until September, Powell said the Fed's commitment would only be limited by the need to get the pandemic controlled and try to build a robust recovery.

"We are deploying these lending powers to an unprecedented extent_We will continue to use these powers forcefully, proactively, and aggressively until we are confident that we are solidly on the road to recovery," Powell said in webcast remarks from the Brookings Institution.

Along with rolling out programs for smaller and mid-sized firms that are at the core of the US economy, as well as local governments, the Fed also broadened the universe of larger corporations it can help to account for the fact that the credit-worthiness of some may decay because of the current crisis.