Federal Reserve likely to pledge support for ailing economy

WASHINGTON (AP) — With the U.S. economy gripped by its worst crisis since the 1930s, Federal Reserve policymakers are expected to offer sweeping assurances Wednesday that they will act as needed to help prevent the damage from growing even worse.

Yet the Fed is unlikely to unveil any new emergency programs. Fed officials have already taken a range of extraordinary actions that have propelled them into new corners of the economy and elevated their bond-buying to new heights.

Chairman Jerome Powell will hold his usual news conference — this time virtually, rather than on site — after the Fed issues its latest policy statement at 2 p.m. Eastern time. Powell will likely fill in details on some of the nine lending programs the Fed has launched to try to aid the economy and to keep rates low in the face of the coronavirus-induced downturn.

The central bank has already slashed its benchmark interest rate to near zero and escalated its purchases of Treasury and mortgage-backed securities to pump cash into financial markets to smooth the flow of credit. It has also said it will buy corporate bonds and lend to states and cities — two actions it has never previously taken.

“The fact that they are operating in those markets is unprecedented," said Nathan Sheets, chief economist at PGIM Fixed Income and a former director of international finance at the Fed. “They are coming up on the extent of their legal authorities here.”

Yet this crisis is unlike any other, and it comes against a backdrop of horrific economic data. More than 26 million Americans have sought unemployment benefits since the viral outbreak shuttered much of the U.S. economy in mid-March. Retail sales fell by a record amount in March. Home sales have plunged.

Economists have forecast that the economy...