The Federal Reserve on Monday announced a massive second wave of initiatives to support a shuttered USA economy, including buying an unlimited amount of bonds to keep borrowing costs low and setting up programs to ensure credit flows to corporations and state and local governments.
The Fed has previously announced it would purchase at least $500bn of Treasury securities and at least $200bn of mortgage-backed securities but will now buy bonds in "the amounts needed to support smooth market functioning".
It marks both a massive intervention into the USA economy by the central bank and an quickly conceived move to adapt to the fact that the US economy may need to shut its doors to keep people safe.
"It's their bazooka moment", said Russell Price, chief economist at Ameriprise Financial Services in Troy, Michigan.
"We will take all necessary steps to support them and protect the U.S. economy", he said.
Yet another program, a Term Asset-Backed Securities Loan Facility, will "enable the issuance of asset-backed securities backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration and certain other assets".
Almost a third of the US population is subject to new rules that close nonessential businesses and discourage people from leaving their homes in order to slow the spread of the virus.
"Safe to say, the chaos of the last few weeks is going nowhere and the way this week has started, it could feasibly be the most remarkable week of the lot".
Stocks initially rose, then fell after the Fed announcement. USA equity futures also reversed a decline, Treasuries extended an advance, oil jumped after the Fed pledged asset purchases with no limit to support markets.
The move helped lower risk premiums in key corporate credit markets that have been disrupted in the outbreak, analysts said.
Saying "aggressive efforts" must be taken to "limit the losses to jobs and incomes", the Fed's Open Market Committee set no limits in its new move to buy Treasury bonds and mortgage-backed securities.
The central bank actions represent "an all-out effort to ensure that the business sector can continue to exist even as economic activity temporarily collapses".
Bullard's grave assessment of the world's largest economy underscores the critical need for Congress and the White House to quickly find agreement on a massive aid program. "The Federal Reserve continues to do all it can to keep markets operating".