The Federal Reserve on Thursday announced it would inject $1.5 trillion into short-term markets to offset the economic impact of the Wuhan coronavirus.
“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement. “The terms of operations will be adjusted as needed to foster smooth Treasury market functioning and efficient and effective policy implementation.”
The liquidity injection follows instructions from Federal Reserve Chairman Jerome Powell.
President Trump has pushed the Fed to lower interest rates to combat the financial dislocation caused by the outbreak. However, he has also frequently criticized Powell, who he nominated for the position in 2017 at the urging of Treasury Secretary Steve Mnuchin.
“Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations,” Trump wrote on Twitter on Tuesday. “They now have as much as a two point advantage, with even bigger currency help. Also, stimulate!”
Wall Street entered a bear market on Wednesday as stocks plummeted over coronavirus fears, supply-shocks stemming largely from China’s quarantine efforts, and an oil price war between Russia and OPEC nations.