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. … READ MORE >
Federal Reserve
Money market primer: How to measure stress in the financial system
We provide a series of accessible metrics that can be used to estimate stress across money markets and help determine when the financial crisis caused by the coronavirus outbreak is intensifying or easing. … READ MORE >
Dealing with disruptions: Policy options for addressing exogenous shocks
The outbreak of the coronavirus and other economic threats add up to a series of supply, demand and financial shocks that now threaten normal life and commercial activity throughout the global community. … READ MORE >
Initial unemployment claims, coronavirus and recession probabilities
Over the next few weeks, policymakers will receive high frequency data that will capture supply and demand shocks that are going to cascade throughout the economy. … READ MORE >
As coronavirus spreads, demand destruction will set in
We are now beginning to observe some demand destruction around the public health crisis, and we expect this will be the major narrative once data begins to arrive in coming weeks. … READ MORE >
The Fed cut its policy rate by a half percentage point. Expect more to come.
The Federal Reserve on Tuesday reduced its policy rate to a range between 1.0% and 1.25% as the central bank implemented a preemptive cut to bolster financial conditions as the coronavirus continues to spread. … READ MORE >
Revising growth expectations down because of shocks from coronavirus
We are revising down our 2020 growth forecast because of supply, demand, and financial shocks rippling through the global and U.S. economies amid the spread of coronavirus. While we do not foresee a recession at this time because of expected fiscal and monetary stimulus measures, we believe economic growth will … … READ MORE >
Powell’s statement is a necessary first step in addressing the coronavirus fallout
Federal Reserve Chairman Jerome Lowell made a well-directed and much-needed statement on Friday in an attempt to begin taking back control of the narrative of the Fed’s response to the coronavirus outbreak. … READ MORE >
How the Fed responds to economic downturns
Since the 1970s, the Federal Reserve has relied on manipulating expectations of short-term interest rates through cuts in its overnight policy rate in response to economic and manufacturing slowdowns. … READ MORE >
As coronavirus spreads, what are the fiscal and monetary policy options?
Investors over the past few days have priced in three 25 basis-point cuts in the federal funds rate by the end of the year, with the first cut implied by the markets coming in June. This is somewhat misguided, given the nature of the global public health emergency that is … … READ MORE >