(Bloomberg) — Congress is likely to pass legislation Monday clearing the way for more emergency action from the Federal Reserve, following already unprecedented steps from the central bank to keep credit markets liquid.
Though details were unclear, lawmakers and Trump adminstration officials on Sunday signaled the package would give the Fed approval to expand its purchases of corporate bonds.
Under its existing authority, the central bank has already created a program to purchase short-term company IOUs, known as commercial paper. Buying longer-dated corporate securities would require Congressional consent.
“There’s a very, very large credit facility that we’re standing up,” Pennsylvania Republican Senator Patrick Toomey said about the legislation on NBC’s “Meet the Press.” “It will be done jointly with the Treasury and the Fed.”
Speaking on Fox News Sunday, Treasury Secretary Steven Mnuchin separately said that the program would be “broad-based” and help businesses weather the coronavirus pandemic and the economic crisis that’s ensued.
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