Have some financial asset prices bounced back too far and too fast?

 5/18/2020  This is never simple to evaluate, as current prices for rates and risk assets have a behavioral component, and appropriate price levels may only be obvious in hindsight. In past cycles, equity bear markets and subsequent recoveries have unfolded over months, not weeks. This more recent volatility event was…

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What are the details of last week’s Congressional actions?

 3/30/2020  The long-awaited Coronavirus Aid, Relief and Economic Security (CARES) Act was passed, totaling $2.2 trillion in its final form. Despite hopes for passage mid-week, the final bill was delayed due to opposition about some components from politicians on both the far right and far left, as well as operational…

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What do the recent Federal Reserve actions and backstop mean?

 3/30/2020  By buying large amounts of some debt (treasuries and agency mortgages, primarily, but also targeted purchases in other segments), the Fed has agreed to become a natural source of promised or actual demand where there otherwise might not be any. This can help stem the tide of possible price…

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Why has the Fed reacted so dramatically? Why has the market reacted the way it has to Fed actions?

 3/16/2020  In short, it’s about messaging and credit markets. While lowering interest rates by a percent to zero at this stage may not make a marginal difference to consumer and corporate borrowers on a day-to-day level, it does allow for a further easing in financial conditions. Such accommodation could theoretically…

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