(Bloomberg) -- A massive U.S. coronavirus stimulus package agreed by Congress and the White House will include $454 billion in funds for the Treasury to backstop emergency action by the Federal Reserve to keep credit flowing to the U.S. economy, said Senator Patrick Toomey.
“It is a very, very big thing; it is unprecedented,” the Pennsylvania Republican told reporters Wednesday on a conference call, adding it was an opportunity to lever up “the unlimited balance sheet of the Fed.” A Fed spokesperson declined to comment.
The Fed has launched a dramatic range of emergency measures to shelter the blow from the virus, which has brought important parts of the economy to a grinding halt. It has slashed interest rates to almost zero and is pumping hundreds of billions of dollars into financial markets to keep credit flowing while pledging to directly lend to U.S. companies for the first time.
Those actions were ramped up on Monday, when the Fed also announced it was working hard on a Main Street Business Lending Program to support small- and medium-sized businesses. It also launched facilities to support the secondary market for corporate debt, and to make direct loans or buy bonds directly from companies. Toomey's comments suggest the corporate debt facilities could be expanded with the new funds.
“First thing is to make sure financial markets are working,” Toomey said. “I expect to see the Fed set up facilities.”
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