Fed's Bullard: We're still in the middle of the crisis here
St Louis Fed president, James Bullard, comments in an interview with the FT
- The risk of a financial crisis remains
- Without managing health policy, we could get a wave of substantial bankruptcies
- That could feed into a financial crisis
- It is probably prudent to keep our lending facilities in place for now
- In any crisis, there can be twists and turns
- The idea is to make sure that markets don't freeze up entirely
- The committee expects to stay low, the markets also expect us to stay low
- Not much impetus to add additional forward guidance as such
- Yield curve control is down the list of priorities for the Fed
There isn't much takeaway from his comments but it mainly reaffirms that the current set of Fed policies will stay in place for quite some time until they are comfortable that we may not see a repeat of what happened back in March.
And as long as US coronavirus cases continue to pick up, that means the Fed will have to stay on their toes in case the market one day decides to turn sour again.
His full interview with the Financial Times can be found here.