US Markets

Fed announces extension in lending facilities until end of the year


Adds details

WASHINGTON, July 28 (Reuters) - The U.S. Federal Reserve said on Tuesday it will extend several of its lending facilities through the year-endas the central bank continues to dial back expectations on how quickly the U.S. economy will recover from the novel coronavirus pandemic.

The extensions apply to those facilities that were due to expire on or around Sept. 30, the Fed said in a statement.

"The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover," the Fed said.

Hopes for a quick recovery have been dashed as the United States continues to struggle to contain the virus. A resurgence in new cases has forced some authorities in the hard-hit South and West regions to close businesses again or halt reopenings.

The U.S. central bank said the extensions apply to the Primary Dealer Credit Facility, Money Market Mutual Fund Liquidity Facility, Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, Term Asset-Backed Securities Loan Facility, Paycheck Protection Program Liquidity Facility, and Main Street Lending Program.

All are designed to keep credit flowing to businesses and households and stave off long-term harm to the economy. Tens of millions are still out of work and fears are growing that the situation could worsen again as relief programs reach their initially scheduled end.

Expanded unemployment benefits for millions of workers are set to expire this week. Republicans and Democrats in Congress are still negotiating a new aid package to extend them, with another round of direct payments to Americans and more loans to help small businesses also being considered.

Two other Fed programs have a longer timeline. The Municipal Liquidity Facility is set to expire on Dec. 31, and the Commercial Paper Funding Facility on March 17, 2021.

(Reporting by Lindsay Dunsmuir; Editing by Chris Reese and Bernadette Baum)

((; +1 202 898 8411;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos


Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at and via Reuters TV.

Learn More