Economics

Fed Expands Emergency Program to Include Muni Funds After Rout

Move seen as ‘starting point’ for battered muni bond market
Fed could expand program to include variable-rate debt

The U.S. Federal Reserve building stands in Washington, D.C.Photographer: Brendan Smialowski/Bloomberg

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By Christopher Condon, Danielle Moran, and Amanda Albright

March 20, 2020 at 3:00 PM UTC

Updated on

March 20, 2020 at 5:36 PM UTC

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The Federal Reserve said Friday it had expanded its emergency program to provide liquidity to money market mutual funds, allowing the purchase of assets from single-state and other tax-exempt municipal money market funds.

Shares of BlackRock Inc.’s iShares National Muni Bond ETF, the biggest municipal-bond exchange-traded fund, traded higher after the announcement.