Federal Reserve Launches QE Infinity buying Treasuries, MBS and Commercial Paper

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    Helmholtz Watson

    The Federal Reserve launched QE infinity Monday, establishing…


    Helmholtz Watson

    Powell at FSOC meeting in Washington: Thu 26 Mar 2020

    Fed’s Powell says:

    Fed has taken series of aggressive actions
    Working now on a Main Street business lending program
    Program well, once the bill passes
    Fed committed to using all tools to safeguard economy

    The Fed action has included:

    purchasing $125 billion in securities every day this week
    buying corporate bonds, asset-backed securities, municipal bonds, and mortgage-backed securities
    Announcing that QE was unlimited
    $300 billion treasury back lending program
    setting up Main Street loan facility
    lowering the target rate by 1.5% to 0.25%


    [size=5][b]US stock futures explode into close after Powell speech …
    short covering hitting stops #ES_F $SPX #DJIA
    Third up day in a row[/b][/size]


    President and chief executive officer of the Federal Reserve Bank of Atlanta Raphael Bostic:

    Fed goal to ensure financial markets keep functioning
    Fed goal is to ensure financial markets keep functioning
    Cash demand is up

    Helmholtz Watson

    Chicago Fed President Charles Evans

    Warns that even in best-case scenario economy will be less-prosperous

    “Even under a best-case scenario, the U.S. and global economy will be less prosperous coming out of this crisis than we were going into it,”

    “We are all using valuable resources and savings that we had intended to use for other aspirations.”

    Helmholtz Watson

    Fed Beige Book: Wed 15 Apr 2020

    [b]Comments in the Fed’s Beige Book:
    Activity contracted sharply and abruptly across all regions
    Hardest hit industries were leisure and hospitality, and retail aside from essential goods
    Most Districts reported declines in manufacturing

    All Districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months
    Employment declined in all Districts, steeply in many cases
    Many Districts said severe job cuts were widespread, including the manufacturing and energy sectors


    NYFed’s Williams:

    Fed cannot act alone fiscal policy has a critical important role
    Coronavirus crisis requires innovative thinking and bold action. Fed doing utmost to lessen below
    New York Fed is taking rapid and significant actions to promote liquidity and stability in the financial markets
    Stress is in financial markets will not entirely abate until pandemic is behind us
    US economy hundred stress from coronavirus outbreak in ways not experienced in our lifetimes
    Full-scale of the economic consequences is still unknown
    more economic pain is still to come
    Coronavirus crisis requires innovative thinking and bold action. Fed doing utmost to lessen below



    Fiscal policy plays the main role during pandemic
    central bank is limited in what we can do and should do and fiscal policy is playing the main role
    Fed is focusing on where the economy is not functioning well to restore liquidity and make sure credit is flowing
    key for success is making sure the businesses and families are able to bridge through this period and try to get back to normal
    inflation likely to be lower than we want, not higher
    Fed ready to use all of its tools to achieve goals
    uncertainty is up demand for dollars, treasuries
    it may be a few months or quarters before people are willing to go back to public events such as Broadway shows or concerts

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