In one line: Whatever it takes.
Fed has announced an array of new measures to support the financial system and the real economy. Extracts from the statement:
• The Fed will purchase Treasury securities and agency mortgage-backed securities—now including commercial MBS—in amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.
• Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing.
• Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
• Establishment of new Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.
• Facilitating the flow of credit to municipalities by expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit.
• Facilitating the flow of credit to municipalities by expanding the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper as eligible securities. In addition, the pricing of the facility has been reduced.
The Fed also will announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses.
SPX is now down 35% from the top. Last two declines swapped away some 50% off the index value. That’s my first target in our case also and its aligned with two support zones from 2000 and 2007, just before the crash. Corona Crash is a bit different in angle of decline as global markets suffered worst day since 1987. Volatility was supposed to start to calm down as central banks unleashed liquidity programs and stimulus, but coronavirus updates in Europe and the U.S. continue to suggest we are nowhere near being out of the woods.
Fed has announced an array of new measures to support the financial system and the real economy. Extracts from the statement:
• The Fed will purchase Treasury securities and agency mortgage-backed securities—now including commercial MBS—in amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.
• Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing.
• Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
• Establishment of new Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.
• Facilitating the flow of credit to municipalities by expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit.
• Facilitating the flow of credit to municipalities by expanding the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper as eligible securities. In addition, the pricing of the facility has been reduced.
The Fed also will announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses.
SPX is now down 35% from the top. Last two declines swapped away some 50% off the index value. That’s my first target in our case also and its aligned with two support zones from 2000 and 2007, just before the crash. Corona Crash is a bit different in angle of decline as global markets suffered worst day since 1987. Volatility was supposed to start to calm down as central banks unleashed liquidity programs and stimulus, but coronavirus updates in Europe and the U.S. continue to suggest we are nowhere near being out of the woods.