The RSM Manufacturing Outlook Index is now 4.2 standard deviations below normal conditions, an assessment of manufacturing conditions that is not as dire as last month, but dire nonetheless. Perhaps last month’s reading of about six standard deviations below normal was an indication from manufacturers that things couldn’t possibly get any worse. And ... READ MORE >
Federal Reserve
More details about the Main Street Lending Program
On April 30, the Federal Reserve released additional guidance on the expanding scope and eligibility for Main Street Lending Program. Much to the credit of firms that submitted comments to the Federal Reserve, the Main Street Lending Program is now eligible for those firms with $5 billion in annual revenue and up to 15,000 employees, an increase from ... READ MORE >
FOMC meeting: Prelude to policy innovation ahead
The Federal Open Market Committee made no material changes to the path of monetary policy on Wednesday as it held the policy rate between zero and 25 basis points and maintained its forward-looking guidance on interest rates and asset purchases. The Fed in its statement included language that did not point to an exit or end point on its accommodative ... READ MORE >
Fed sets up $2.3 trillion in liquidity commitments, introduces Main Street Lending Program
The Federal Reserve made history on Thursday by moving aggressively to provide up to $2.3 trillion in liquidity commitments to support the economy. This policy intends to bolster households, small and medium-sized firms, and the ability of state and local governments to float debt to ensure critical services during the pandemic. But the liquidity ... READ MORE >
Federal Reserve backstops Paycheck Protection Program
The Federal Reserve on Monday put forward another in a series of lending facilities intended to fortify the economy as it absorbs three large shocks that are cascading across the U.S. economic landscape. In our estimation, this move represents a de facto rescue of the Paycheck Protection Program, the Trump administration's signature $350 billion program ... READ MORE >
The swift and significant monetary and fiscal policy responses to the coronavirus
March has been a month for the ages – one that fiscal and monetary policymakers will never forget. Congress put forward roughly $2.2 trillion, or equal to 11.4% of gross domestic product, in fiscal aid to address current and coming economic difficulties around the country. That boost will most likely show up later in the year. Based on past stimulus and ... READ MORE >
Fed takes robust action to backstop the economy and financial markets
The Federal Reserve moved aggressively on Monday to mitigate what is going to be a severe disruption in the American economy by committing to an open-ended quantitative easing program and the construction of the Main Street Business Lending Program to support small and medium-sized firms. That disruption will take the form of a depression-like set of ... READ MORE >
Revising growth lower: A reset is coming for the U.S. economy
The American economy is simultaneously absorbing three distinct shocks, each of which will act as a large drag on economic growth during the current and second quarters of the year. The impact of the coronavirus will cause a disruption to American society that will last well beyond the current crisis and will affect growth over the next three to four ... READ MORE >
U.S. and global financial conditions imply economies at risk
Global financial conditions continue to flash red as global central banks acted forcefully to address the economic and financial effects of the COVID-19 virus. The Federal Reserve put a punctuation mark on monetary policy on Sunday, dropping the fed funds rate back to the zero lower bound (ZLB), boosting asset purchases, opening dollar swap lines and ... READ MORE >
Fed intervenes in credit markets, but will it be enough?
The Federal Reserve along with its major central banking partners moved on Sunday to restore functioning credit markets in an attempt to put a floor under the global economy and calm financial markets. The Fed announced a restoration of quantitative easing to the tune of $700 billion. In addition, the central bank cut its policy rate by 100 basis points, ... READ MORE >