https://www.cnbc.com/2020/03/12/fed-to-pump-more-than-500-billion-into-short-term-bank-funding-expand-types-of-security-purchases.html

Summary

In the paper. "Fed to pump more than $1 trillion in dramatic market intervention ramping up in the meltdown of coronavirus," reported by Jeff Cox, Cox talks about the Fed's efforts to counter coronavirus. Their main objective was to calm down the market ever since the market became unpredictable. The Fed's move included the injection of $1.5 trillion into the financial system.This shift was "the second day in a row and the Fed has stepped in for the third time this week," cox reports. In addition, "The New York Fed desk will see the second part of the new operations providing $500 billion in a three-month repo operation and one-month activity. The activities will take place weekly throughout the rest of the program," says Cox. The more the corona virus  affects the nation the more money the fed pumps into the economy.

Reflection

As a 20 year old who has a basic understanding of the market, I find it counterintuitive to spend a trillion dollars into our economy when we are already trillions in debt. If I were asked why the fed would spend money on the market I would have to assume to keep us out of a total economic collapse during this global pandemic and as a form of regulating the economy. One question that I do take away from learning about the fed is how does it function while under such debt?

JeffCoxCNBCcom. (2020, March 12). Fed to pump in more than $1 trillion in dramatic ramping up of market intervention amid coronavirus meltdown. Retrieved from https://www.cnbc.com/2020/03/12/fed-to-pump-more-than-500-billion-into-short-term-bank-funding-expand-types-of-security-purchases.html

Fed Gearing up To Help to Smaller Local Governments 

Link: https://www.nytimes.com/2020/04/20/business/economy/fed-local-governments-coronavirus.html

Summary:

This article reflects on the current phenomenon that is ruining our world right now as we know it. The coronavirus has altered life for everyone across the globe from quarantine to unemployment to no sports. As we all scramble and try to stay safe, many are losing jobs and many businesses are losing revenue as lockdown orders are put into place. This pandemic has influenced nearly every aspect of daily life for everyone. This post, however, focuses on the economic impacts of this virus. The article focuses primarily on local companies and municipalities, and examines how our national government is struggling to save our economy as unemployment levels increase and large corporations shut down. The article explains how the Fed aims to work with local governments and companies by buying municipal bonds, while local officials are pushing the central bank to do so. The Fed stated that they will begin purchasing these bonds using their emergency lending powers. The article explains that this move is very radical and controversial as the Fed is supposed to stay uninvolved politically. 

Reaction: 

To me the article was very interesting because smaller companies are often overlooked by the government in favor of large companies as large companies have more influence. I feel like more attention needs to be drawn to help small businesses because they don’t have the bankroll to support being closed through a pandemic whereas large companies do. Also these small companies employ local citizens so to me it feels personal. Fortunately after reading the article my fears are lessened as the Fed appears to be moving quickly and strong in response to the pandemic. However it is important to see how these decisions affect our economy long term.

Citation: 

Smialek, Jeanna. “Fed Gearing Up to Help to Smaller Local Governments.” The New York Times. The New York Times, April 20, 2020. https://www.nytimes.com/2020/04/20/business/economy/fed-local-governments-coronavirus.html.