The central bank said its program to support money market mutual funds will also serve as a backstop for state and local governments.
The Money Market Mutual Fund Liquidity Facility, established under the central bank’s emergency authority, echoes a version that was set up during the global financial crisis.
The Federal Reserve's support for the commercial paper market made clear that it was willing to go beyond cutting interest rates, but the central bank may feel pressure to do even more as the crisis worsens.