The Federal Reserve announced Wednesday that it will continue to load up on mortgage-back securities to ensure credit is available to businesses and individuals to keep the economy afloat during the coronavirus pandemic.
“We have been purchasing sizable quantities of Treasury and agency mortgage-backed securities in order to support orderly conditions in the markets, which are vital to the flow of credit in the economy,” Chairman Jerome Powell said. “To sustain smooth market functioning and foster the effective transmission of monetary policy to broader financial conditions, we will continue to increase our holdings of Treasury and agency mortgage-backed securities at least at the current pace. These purchases are also fostering more accommodative financial conditions.”
Powell emphasized the need to keep interest rates low while using all the tools available to the Fed as the coronavirus continues to impact the economy.
“We are committed to using our full range of tools to support the economy in this challenging time,” he said. “We have held our policy interest rate near zero since mid-March and have stated that we will keep it there until we are confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals.”