The step will help governments cover the shortfalls they are facing because of the vast shutdowns sweeping over much of the country and prevent waves of short-term borrowing by localities sold to plug budget holes from potentially destabilizing the public markets.
The move was broadly welcomed by Wall Street analysts, municipal bond investors, underwriters and lobbying groups, even though it fell short of buying already-issued debt as some had sought. Moreover, it’s only open to cities with population above 1 million and counties with 2 million or more, limiting its direct affect on local governments to the approximately 26 who are big enough to qualify, based on Census figures.
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