The FED took the necessary steps on Thursday to inject more than $1.5 trillion into short term funding markets in an attempt to tranquil investors who are in panicking amid the economical impact of the situation created from the coronavirus.
Stocks plunged down on Thursday evening, with Dow Jones down by 7.8% and S&P 500 index 7.3%.
With the market turmoil created from the coronavirus, the Federal Reserve on New York reveled the plan to flood the market with short term funding capital to prevent the markets from the collapse.
With advertise confusion whirling, the New York Fed’s Open Market Trading Desk uncovered designs to flood the transient financing markets with capital.
“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the Fed said in a statement.
This will be done in three phases which starts with a $500 billion repurchase agreement (repo) which will be followed by two other 500 billion Repo agreements in addition to the ongoing repos.
Fiat money is unlimited, this is why it is easy to inject new money whenever central banks decide that it is necessary. Resulting in increased inflation that erodes people’s wealth every year. Bitcoin fixes this problem with its fixed supply.
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