Fed launches an additional $2.3 trillion in monetary policy measures

$2.3 trillion in monetary stimulus aimed at small and medium-sized businesses, municipalities, and more support for the corporate bond market.

The Federal Reserve a set of new programs Thursday that will provide $2.3 trillion in loans to reach small and midsize businesses, as well as U.S. cities and states.  The loans would be geared towards businesses with up to 10,000 employees and less than $2.5 billion in revenues for 2019. Principal and interest payments will be deferred for a year.

 The Fed said the programs would include a backing of the Payroll Protection Program and other measures geared towards getting money to small businesses, in addition to bolstering municipal finances with a $500 billion lending program.

 "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," said Fed Chair Jay Powell in a statement.

The Fed also  on its plans to buy corporate bonds both at an investment-grade level as well as high-yield, or junk bonds. While the Fed has already announced that it would buy highly rated corporate bonds, its deeper push into lower rated and riskier corporate bonds put a big safety net under that part of the market.

 The backing of these so-called so-called fallen angels—newly downgraded corporations that had carried investment-grade ratings until March 22 - caused corporate bond prices up and down the ratings ladder to spike. Those fallen angels include companies like Ford and Continental Resources that are fundamentally sound, but have had their businesses crippled by the sudden stop in the global economy.