The Fed should have acted harder and faster and stabilized expected national nominal income trends immediately, without giving politicians an excuse to try to expand the national debt by $2 trillion. But better late than never. https://t.co/hTKrEKGxDX
Open-ended quantitative easing (QE). Just over a week ago, the Fed had set a limit of $700 billion on these bond-buying programs
Two lending facilities to large companies: Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for existing corporate bonds
Bringing back the crisis-era Term Asset-Backed Securities Loan Facility (TALF) to support the flow of credit to consumers and businesses
Expanding the money market mutual fund liquidity facility to include wider range of municipal bonds
Expanding the commercial paper credit facility
And the Fed said it expect to soon launch a Main Street Business Lending Program to support small and medium sized businesses.
The Fed is supposed to be the last resort lender to just bank this seems like the new QE approach and extension of moving into buying other assets such as cooperate bonds, and municipal bonds on the market make it a lender of last resort to the entire economy.
The new PMCCF is going to not only allow the buying of cooperate bonds but the underwriting as well.
Not sure the Fed has the tools it would need to stop the bleeding and in my view this should solve the liquidity crunch (I’m sure there will be issues down the road) but ultimately I don’t think that alleviates the stress placed on the market.
Curious, what everyone’s thoughts are at this point ( and hopefully someone smarter than me can forecast how this will go)?
It's a bandaid on a bullet wound. Quantitative easing is not going to cure a 20 trillion dollar economy grinding to a halt.
The coronavirus relief bill must be passed as soon as possible, it will at least stave off catastrophic collapse while people and businesses are running on fumes. Unfortunately it seems like the Democrats are more interested in blocking the bill and causing untold suffering so they can blame it on Trump.