Community QE2: New Key Provisions and an Updated ‘Game Plan’ for State and Municipal Action
4 Pages Posted: 3 May 2020
Date Written: April 28, 2020
On April 28th the Fed announced it would already be loosening the terms of its an unprecedented new Municipal Liquidity Facility (‘MLF') for States and their Subdivisions now struggling to address the nation’s COVID-19 pandemic. This is effectively ‘Community QE2’ in all but name. Because Community QE, which is still in the process of being operationalized, will constitute a literal lifeline to States and their Subdivisions, and is in light of its novelty still as unfamiliar as it is essential, this Memorandum briefly summarizes what the new Facility enables now and will likely enable in future. On this basis it then recommends a three-phase ‘Game Plan’ for States and their Subdivisions to put into operation immediately – that is, during the first week of May.
Keywords: Community QE, Coronavirus, COVID-19, Federal Reserve, Fiscal Federalism, Pandemic Response, QE, Quantitative Easing
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