securities loan facility ( talf ). the talf will lend against abs backed by newly issued auto loans, credit card loans, and other consumer and small business loans. in turn, these loans will support consumers seeking to obtain these important types of credit. the federal reserve also took action with the treasury department under section 13 ( 3 ) to support the credit needs of large employers through the primary market corporate credit facility and the secondary market corporate credit facility. these facilities primarily purchase bonds issued by u. s. companies that were investment grade on march 22, 2020. by purchasing these bonds, the federal reserve is able to lower the borrowing costs for investment - grade companies and thus facilitate economic activity. the federal reserve is also preparing to launch the main street lending program, which is designed to provide loans to small and medium - sized businesses that were in good financial standing before the pandemic. importantly, with these and other facilities that the federal reserve has not employed before, public input has been crucial in their development. for example, in response to comments received, we lowered the minimum loan size and raised the maximum loan size across the three lending facilities within the program ; in addition, we expanded the size of firms allowed to borrow under the program to companies with up to 15, 000 employees. these changes should help the program meet the needs of a wider range of employers that may need bridge financing to support their operations and the economic recovery. we will continue to adjust facilities as we learn more. to bolster the effectiveness of the small business administration ’ s paycheck protection program ( ppp ), the federal reserve is supplying liquidity to lenders backed by their ppp loans to small businesses. and to help state and local governments better manage cash flow pressures in order to continue to serve households and businesses in their communities, the federal reserve, together with the treasury department, established the municipal liquidity facility under section 13 ( 3 ) authority to purchase short - term debt directly from u. s. states, counties, cities, and certain multistate entities. the two corporate credit facilities, the main street lending program, and the municipal liquidity facility all have equity provided by the treasury department to protect the federal reserve from losses. the passage of the cares act by congress was critical in enabling the federal reserve and the treasury department to establish these real economy emergency lending programs that have the capacity to make more than $ 2. 6 trillion in loans. the tools that the federal reserve is using under its 13

, along with our responsibilities to promote stability of the financial system. we are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public - sector response. congress ’ s passage of the coronavirus aid, relief, and economic security act ( cares act ) was critical in enabling the federal reserve and the treasury department to establish many of the lending programs that i discuss below. in discussing the actions we have taken, i will begin with monetary policy. in march, we lowered our policy interest rate to near zero, and we expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum - employment and price - stability goals. in addition to monetary policy, we took forceful measures in four areas : open market operations to restore market functioning ; actions to improve liquidity conditions in short - term funding markets ; programs in coordination with the treasury department to facilitate more directly the 1 / 4 bis central bankers'speeches flow of credit to households, businesses, and state and local governments ; and measures to allow and encourage banks to use their substantial capital and liquidity levels built up over the past decade to support the economy during this difficult time. let me now turn to our open market operations and the circumstances that necessitated them. as tensions and uncertainty rose in mid - march, investors moved rapidly toward cash and shorter - term government securities, and the markets for treasury securities and agency mortgage - backed securities, or mbs, started to experience strains. these markets are critical to the overall functioning of the financial system and to the transmission of monetary policy to the broader economy. in response, the federal open market committee undertook purchases of treasury securities and agency mbs in the amounts needed to support smooth market functioning. with these purchases, market conditions improved substantially, and thus we have slowed our pace of purchases. while the primary purpose of these open market operations is to preserve smooth market functioning and effective policy transmission, the purchases will also foster more accommodative financial conditions. as a more adverse outlook for the economy associated with covid - 19 took hold, investors exhibited greater risk aversion and pulled away from longer - term and riskier assets as well as from some money market mutual funds. to help stabilize short - term funding markets, we lengthened the term and lowered the rate on discount window loans to depository institutions. the board also established, with