The Federal Reserve Bank of New York on Thursday took steps to inject more than $1.5 trillion into the markets in a bid to calm investors who are fearful of the economic impact of the coronavirus.

Stocks briefly pared their steep losses Thursday afternoon. But the extremely volatile market activity continued: The Dow Jones industrial average and S&P 500 index were down 7.8% and 7.3%, respectively, around 1:40 p.m.

With market chaos swirling, the New York Fed's Open Market Trading Desk revealed plans to flood the short-term funding markets with capital.

"These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak," the Fed said in a statement.

The initial step involves an offer to purchase $500 billion in a so-called "repo operation" beginning today. A repo operation is an effort to keep interest rates in the Fed's preferred range.

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That $500 billion purchase will be followed by two additional $500 billion rounds in addition to other ongoing repo operations.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.