Groups representing states and localities are urging the Federal Reserve and Treasury to create new programs to buy a wider range of securities and help municipalities grappling with revenue delays due to the coronavirus.
In a letter sent to the Fed and Treasury this week, the National Association of State Treasurers, Government Finance Officers Association and the National Association of State Auditors, Comptrollers and Treasurers pushed for the Fed to buy munis on secondary market and create a financing program to help municipalities struggling with late revenues.
“As you know, an historic cash panic, prolonged paralysis in the primary municipal bond market, and impending budget shocks stemming from the pandemic have all culminated at once, forcing many businesses and nearly every state and local government into an unprecedented state of damage control,” the groups wrote in the letter. “Absent support for the municipal debt market, state and local government budgets will be further stressed at the most inopportune time, particularly as revenues decline as a result of business closures and rising unemployment.”
(Read more: The Bond Buyer)
