The bill, which includes payroll assistance and aid to state and local governments, faces a chilly reception in the Senate.
“We saw a risk to the outlook of the economy [from the coronavirus outbreak] and we chose to act," Fed Chair Jerome Powell says.
“We took this step to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks."
The Board of Governors voted 4-1 in favor of the changes, with the dissenter saying they would weaken core safeguards.
The Fed's move to grow its balance sheet comes after last month's “unexpectedly intense volatility” in the funding markets.
“For the foreseeable future, we’re going to be looking at doing the sorts of things we did the last two days," Fed Chair Jerome Powell says.
Fed members agreed, however, that they did not want to signal new cuts.
In Powell’s testimony to Congress, he said ‘crosscurrents’ have been weighing on economic activity and the central bank will ‘act as appropriate.’
The Fed doesn't see "a strong case for moving [rates] in either direction" amid weak inflation and solid economic growth.
The central bank indicated it will slow the pace of interest rate increases in response to changing economic conditions.
Fed chair Jerome Powell calls the move "appropriate for what is a very healthy economy," but financial markets don't seem to share his confidence.
U.S. shoppers are benefiting from moderate inflationary pressures, while incomes increased 0.5% last month.
