BANK OF AMERICA: These are the Fed's 4 main tools for combating coronavirus's economic fallout
on Monday. The flattened curve limits the aid a Treasury twist could deliver and drives the need for a fourth policy move to lift economic activity, according to the bank.
Should the Fed require additional stimulus after lowering rates, quantitative easing measures could return for the first time in more than five years. The policy involves the central bank purchasing assets to inject capital into money markets. The Fed will consider buying up Treasury bills and mortgage-backed securities after exhausting its other, more traditional actions, Bank of America said.
There's "plenty of firepower to purchase," the analysts wrote, mentioning $9 trillion in Treasury bills, $8.5 trillion in mortgage-backed securities, and another $1 trillion in debt held by agencies including Fannie Mae and Freddie Mac. The flat yield curve limits the power of Treasury purchases and will likely push the Fed to buy up more agency mortgage-backed securities, they added.
Bank of America included yield curve control, negative interest rates, and QE operations focused on credit and equities as possible stimulus measures but deemed them highly unlikely. The central bank "will be dusting off the '08 playbook" and focusing on monetary stimulus, the analysts wrote. The Fed's actions will be joined by government-issued fiscal stimulus in the near future, the bank added.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Why Deadmau5 Is Fed Up And Feuding With Marshmello | Gossip CopDeadmau5 is not a fan of DJ Marshmello. The two producers have been feuding for quite some time after Deadmau5 had enough of Marshmello's antics.
Read more »
Fed faces headache, taps epidemiologists in hunt for policy cluesThe escalating coronavirus outbreak is giving the U.S. Federal Reserve a policy ...
Read more »
Op-Ed: The Fed does enough by following its mandate and keeping the public informedCentral banks in the U.S., European Union and China are already cooperating by maintaining very accommodative credit conditions. Throwing more money at the liquidity flooded asset markets is not what's needed, writes Dr. Michael Ivanovitch.
Read more »
North Carolina police shooting wounds suspect, sparks tension, protests: 'City is fed up'In an early-morning press conference, police addressed 'misinformation' circulating on social media about the suspect's age and the circumstances of the shooting.
Read more »
A Tale Of Two Takes: Tucker Carlson Calls Coronavirus “A Major Event”; Trish Regan Sees An “Impeachment Scam”About an hour after President Donald Trump told reporters they are working on an economic package to deal with the fallout from the coronavirus, Fox News’ Tucker Carlson and Fox Business&821…
Read more »
U.S. stocks dive more than 7% as oil war and coronavirus fears slam marketsA collapse in oil prices is the latest fallout from the coronavirus oubreak and adds to the gloomy financial and economic outlook.
Read more »