The Federal Reserve is expanding its facility backing money market mutual funds to also provide support to the municipal bond market as the economy grapples with fallout from the virus pandemic.
The Fed announced the creation of the Money Market Mutual Fund Liquidity Facility Wednesday night among a host of recent emergency measures to preserve the flow of credit to households and businesses that could face financial difficulties as the coronavirus wreaks havoc on communities.
On Friday, the Fed said the program will also serve as a backstop for state and local governments through municipal bonds.
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