Macro liquidity has slowed slightly in recent weeks as the Fed has taken its foot off the accelerator. But it continues to grow at an historic pace. What does that mean for the short term and the long term.
Oh, wait.
There is no long term.
In US and Europe daily new cases and deaths remain well above the levels when restrictions were imposed. If these levels were concerning back then, why do the higher levels today not warrant continued restrictions?
The distributional effects of COVID19 pandemic impact on the labour markets in the U.S. will likely result in a massive debasement of the national wealth shares of the ‘Main Street’ segment of American society (the 90 percent)
Depression was a consequence of egregious boom-time excess rather than the Fed’s post-crash failure to print sufficient money. Now COVID19 strikes at peak fragility.
Is it really that simple? The central bank hands out “free” money or “supports” markets with purchases, so that’s all there is to it. Once Jay Powell or Christine Lagarde moves in with the big bazookas, who’s not going to climb on board the money train as it rockets out of the inflation station?If only […]
Is it already priced in? Depends, of course, on who you ask and more importantly which market is carrying out the presumed discounting. Stocks surged on the idea that though this is epic in its misery we’re already getting past the worst. Short run disruption, a big one, but nothing more. It’s almost preprogrammed at […]
So, BLS just printed their April 2020 numbers of official non-farm payrolls: https://www.bls.gov/news.release/empsit.t01.htm. And things are, expectedly, ugly.Civilian ‘non-institutional’ population is up 1,203,000 y/y, while employment is down 23…
The BLS reported a seasonally adjusted 20.5 million jobs lost in April and stocks rallied on the news. Wall Street loves both death and unemployment apparently.
Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
Fed QE $8.000B Coupon Purchase 2020-05-08 NYFed treasury securities operations