- U.S. FED CHAIR POWELL SAYS SCOPE AND SPEED OF DOWNTURN ‘WITHOUT PRECEDENT’
- RECOVERY MAY TAKE TIME TO GATHER MOMENTUM
- CORONAVIRUS SHOCK APPEARS TO BE LARGEST ON RECORD
- FED SURVEY SHOWS 40% OF HOUSEHOLDS WITH LESS THAN $40,000 INCOME HAVE LOST A JOB
- FISCAL RESPONSE HAS BEEN FASTEST, LARGEST FOR ANY POSTWAR DOWNTURN
- FED HAS ALSO ACTED WITH UNPRECEDENTED SPEED, FORCE
- POLICY RESPONSE HAS PROVIDED A MEASURE OF RELIEF, STABILITY
- CORONAVIRUS CRISIS RAISES LONG-TERM CONCERNS
- ADDITIONAL POLICY MEASURES MAY BE NEEDED TO AVOID LASTING DAMAGE TO ECONOMY
- FED WILL CONTINUE TO USE TOOLS ‘TO THEIR FULLEST’ UNTIL CRISIS HAS PASSED, RECOVERY WELL UNDERWAY: CHAIR POWELL
- FED LOANS WILL HELP MANY BORROWERS GET THROUGH CRISIS, BUT TIME CAN TURN LIQUIDITY PROBLEMS INTO SOLVENCY PROBLEMS
- ADDITIONAL FISCAL SUPPORT COULD BE COSTLY, BUT WORTH IT IF IT HELPS AVOID LONG-TERM ECONOMIC DAMAGE
Bonds were effectively unchanged in the overnight session. After sharp losses yesterday afternoon, stocks opened lower in Asia and managed to regain about a third of the losses. Powell's prepared remarks (released at 9am) pushed stocks and bond yields lower, but things could change as the Q&A begins.
10yr yields are down 1.8bps on the day at .649 and 2.5 UMBS are up 3 ticks (.09) at 103-17 (103.53).