Trump signs $2 Trillion Coronavirus Stimulus Bill

Late Friday afternoon, President Trump signed a $2.2 trillion coronavirus stimulus bill to respond to the coronavirus pandemic. Called the Coronavirus Aid, Relief & Economic Security Act the bill will provide relief to individuals, small businesses, and corporations in the form of loans, tax breaks and direct payments.

Combined with Federal Reserve measures, it will provide around $6 trillion in stimulus to the economy, according to chief White House economic adviser Larry Kudlow. About $454 billion of the $2.2 trillion dollars will go towards facilities established by the Fed. Specifically the Treasury will capitalize SPVs associated with Federal Reserve facilities, backstopping all the loans the Fed makes under the facilities to prevent losses. Each dollar of backstop from the treasury is enough to support $10 of loans giving a 10-to-1 ratio.

Why it matters:

• At $2 trillion, the bill would be the largest stimulus bill ever in nominal terms and the 5th largest ever relative to GDP.
• At $2 trillion the amount represents 9.3% of GDP and would provide weeks of relief while the economy remains on pause due to the coronavirus.