Stock markets continued to rebound Thursday, as the Dow closed the week 1.2% up after the Federal Reserve reported plans to provide up to $2.3 trillion in loans to support households and local governments, as the U.S. economy continues to work through the disruptions from the novel coronavirus. According to Yahoo Finance, the central bank also released more details on its anticipated Main Street Lending Program, which it says will support up to $600 billion in loans tied to small- and mid-sized businesses.
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible,” Fed Chairman Jerome Powell said in a statement.
In addition to the loans mentioned above, the Fed will also expand its liquidity efforts on corporate credit by increasing the size of its Primary and Secondary Market Corporate Credit Facilities and its Term Asset-Backed Securities Loan Facility. According to reports, the facilities will now support up to $850 billion in credit backed by $85 billion in credit protection from the Treasury.
An additional factor that helped push the market is the announcement from OPEC and allied oil producers, a group known as OPEC+, that agreement has been reached on Thursday to cut output by 10 million barrels per day (bpd) in May and June to help prop up prices battered the coranavirus crisis, the group said in a statement.
It said the cuts would be eased between July and December to 8 million bpd and the reductions would then be relaxed further to 6 million barrels between January 2021 to April 2022.
OPEC+ said it would hold another video conference meeting on June 10, to assess the market.