Thread by @manasilvora

March 27th Trump signed a $2.2 trillion relief package into law - the largest emergency aid in US history.

In response to Covid, we have seen
- Monetary stimulus by Central Bank🤑
- Fiscal stimulus by Government🏛️

A thread on what has transpired so far and stock market moves 👇

🤑March 3: Fed made an emergency rate cut and slashed fed fund rates by 0.5% - the largest one-time cut since the 2008 financial crisis

📉S&P 500: -2.8%

nytimes.com/2020/03/03/bus…

🏛️March 6: "Phase one" stimulus bill - $8.3 billion spending bill to fund efforts to fight the pandemic including vaccine research and to address the public health concern.

📉S&P 500: -1.7%

cbia.com/news/issues-po…

🤑March 12: To address highly unusual disruptions in Treasury financing markets, the Fed massively expanded its reverse repo operations adding $1.5 trillion of liquidity to the banking system

📉S&P 500: -9.5%

finance.yahoo.com/news/federal-r…

🏛️March 13: Trump announced a national emergency over coronavirus, allowing the Federal Government to distribute up to $50 billion in aid to states, cities, and territories

📈S&P 500: 9.3%

cnbc.com/2020/03/13/tru…

🤑March 15:
- Fed cut rates by a percentage point, down to 0-0.25%
- Restarted QE with $500 billion in treasuries & $200 billion in mortgage-backed securities (MBS)
- Changes to discount window, intraday credit, bank capital & reserve requirements

Closed

federalreserve.gov/newsevents/pre…

🤑March 16: Fed increased reverse repo operations by an additional $500 billion (on top of the previously mentioned $1.5 trillion)

📉S&P 500: -11.9%

newyorkfed.org/markets/opolic…

🏛️March 17: Steven Mnuchin announced that individuals and businesses will have an extra 90 days past April 15 to pay their tax bills. Estimated to inject up to $300 billion into the economy Notably, tax return form is still due April 15.

📈S&P 500: 6%

abcnews.go.com/US/wireStory/a…

🤑March 17 & 18: Fed introduced three new programs - CPFF, PDCF and MMLF to enhance liquidity & facilitate credit availability to businesses & households. MMLF is similar to AMLF program from 2008.

huntonak.com/en/insights/pr…

federalreserve.gov/newsevents/pre…

🏛️March 18: "Phase two" stimulus bill - Roughly $100 billion
- Free Covid testing including the uninsured
- 2 weeks paid sick and family leave
- Increased funds for Medicaid and food programs
- Increased unemployment insurance benefits

📉S&P 500: -5.1%

cbia.com/news/issues-po…

🏛️March 20th: Betsy Devos announced "All borrowers with federally held student loans will automatically have their interest rates set to 0% and option to suspend payments for a period of at least 60 days.

📉S&P 500: -4.3%

ed.gov/news/press-rel…

🏛️March 21: The Treasury Department and IRS announced that the federal income tax 'filing' and 'payment' due date is automatically extended to July 15, 2020. Taxpayers do not need to file any additional forms or call the IRS to qualify.

Closed

irs.gov/newsroom/tax-d…

🤑March 23: Expanded asset purchases of both treasuries and MBS by an additional $625 billion. Established PMCCF, SMCCF, TALF to buy corporate bonds and asset-backed securities. New programs will provide $300 billion in new financing

📉S&P 500: -2.9

federalreserve.gov/newsevents/pre…

🤑March 26:
- Fed offered regulatory relief for smaller FIs for submitting their March-end filings
- Fed to establish Main Street Business Lending Program to support lending to small and medium-sized businesses

📈S&P 500: 6.2%

federalreserve.gov/newsevents/pre…
federalreserve.gov/newsevents/pre…

🏛️March 27th: "Phase three" stimulus bill - $2.2 trillion stimulus package (see image). This bill has provisions for cash & assistance to individuals, main street businesses, hard-hit airlines, and manufacturers, among others.

📉S&P 500: -3.3%

cnbc.com/2020/03/27/hou…

1/3 Individuals

- One-time payments of $1,200 will be sent to eligible individuals. Total cost 290 billion
- Additional $600/week of unemployment benefits for up to four months. Includes gig workers, contractors. Total cost $250 billion

2/3 Individuals

10% penalty waived for early withdrawal of funds up to $100k from retirement accounts. The sum withdrawn may be re-contributed within 3 years, without subject to the usual contribution caps. If not repaid, it will be taxed at ordinary income tax rates over 3 yrs

3/3 Individuals

- Expands the family leave provided in "Phase two". Those covered can get up to 12 weeks of family leave (with the first two weeks unpaid)
- Employees (both part-time and full time) will get 80 hours of paid sick leave at full pay

nytimes.com/article/corona…

1/3 Businesses

- $367 billion federally-guaranteed loan program for small businesses who must pledge not to lay off their workers
- $30 billion in emergency education funding and $25 billion in emergency transit funding

2/3 Businesses

- Loans for distressed companies from a $425 billion fund controlled by the Federal Reserve. Additional $75 billion for industry-specific loans, including airlines and hotels. As part of the deal, airlines will be prohibited from stock buybacks and CEO bonuses

3/3 Businesses

- $100 billion in assistance for hospitals and health systems across the nation with critical investments into personal and protective equipment for health care workers, testing supplies, increased workforce and training.

abcnews.go.com/Politics/trill…

Full breakdown
washingtonpost.com/business/2020/…

In conclusion, after hours of research, I learned that the response to #COVID19 is 'Money Printer goes Brrr' 🤣