Fed Reinstates Commercial Paper Facility to Relieve Market Strains

The video discusses the Federal Reserve's actions in response to market expectations, similar to steps taken in 2009. It explains the setup of a commercial paper funding facility by the New York Fed, backed by a $10 billion Treasury backstop. The Fed's actions are under the 13(3) section of the Federal Reserve Act, requiring Treasury's permission. The video also explores the potential for expanding the Fed's QE program, though current legal constraints and lack of Congressional movement make this unlikely.

What is the significance of the $10 billion backstop from the Treasury?

What are the limitations currently placed on the Federal Reserve regarding its QE program?