The Federal Reserve extended most of its emergency lending programs by three months, through the remainder of 2020, to help an economy still struggling with the coronavirus pandemic.

“It’s a sign that more support is needed for the economy,” said Scott Brown, chief economist at Raymond James. In particular for facilities like the Main Street Lending Program, Brown said the Fed is signaling it still anticipates significant demand in the coming months.

U.S. Treasury Secretary Steven Mnuchin said in a separate statement that he had approved the three-month extensions. The dollar held steady and Treasury yields and U.S. stocks largely maintained their declines after the news.

Ongoing Support

”What they’re going to constantly do is remind the market that they are here and they are not going anywhere anytime soon,” said Michael Antonelli, managing director and market strategist at Baird. “It’s an important part of what they need to do when changing interest rates no longer becomes a viable thing to do.”

Since mid-March, the Fed has opened nine emergency programs aimed at pumping liquidity into short-term credit markets and extending credit to businesses and local governments hit hard by the economic fallout from the virus.

The facilities have the potential to deploy trillions of dollars, but so far have only about $100 billion in loans outstanding, partly because traditional lenders have returned to short-term markets, making Fed liquidity unnecessary.

‘Provide Certainty’

“The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover from the Covid-19 pandemic,” the Fed said in a statement Tuesday.

The extension applies to seven programs; the Municipal Liquidity Facility was already set to expire on Dec. 31, and the Commercial Paper Funding Facility was due to end on March 17, 2021.

Fed policy makers began a two-day policy meeting today and are scheduled to release a statement at 2 p.m. Wednesday. Chairman Jerome Powell will follow with a 2:30 p.m. press conference.

--With assistance from Saleha Mohsin, Benjamin Purvis and Claire Ballentine.