For the second time this week, we’ve seen a greater than 7% #market decline in SPX; the @CBOE’s index of equity market volatility resides in the 60s, far above historical averages.
Further, meaningful fiscal #policy support may come down the road, but as of right now #political gridlock in Washington continues to be the order of the day.
For these reasons, we think that the @federalreserve is very likely to step up to the plate again with further policy easing, and sooner rather than later, in our estimation.
With the #Fed’s recent inter-meeting cut, robust overnight/term #repo operations, and an expected cut to policy rates close to, if not to, zero sometime over the next week, the central bank is supplying massive accommodation to #markets.
And while all these efforts may help at the margin, there is also a degree to which this is “pushing on a string,” as this #coronavirus health scare and uncertainty over its #economic repercussions won’t respond as readily to blunt monetary policy solutions.
Still, in regard to the #Fed’s response, we're supportive of today’s announcement to extend its current bill purchase program to move out the #yieldcurve to assist #market functioning.
And as we’ve mentioned before, there will be some extraordinary #investment opportunities coming out of the #market turmoil, but #investors will need to feel greater confidence that the situation is being adequately dealt with, even if we recognize full solutions may be a way off
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.