The Fed put is on
- 'Unusually wide' range of plausible economic scenarios
- Fed will continue to act forcefully and proactively
- Will do more if necessary, says there is a possible need for more fiscal action as well
- Actions so far are 'buying some time' for US economy
- Pandemic will be 'disinflationary' as shock to demand greater than shock to supply
- We will be watching during recovery at whether the underlying capacity of the economy is intact or damaged
- It will take time to get a better sense of the economy's trajectory
- Discussion about balance sheet and communications is 'down the road'
- The longer this goes on, closer we look to lasting harm
- Hope to have a better sense of outlook in the early fall
- Fed briefing on yield curve control will be down the road
The Fed is repeatedly highlighting that it may (and probably will) do more to boost the economy without offering any real specifics on it besides some ineffectual yield curve control and even more QE. Still, it's clear that it's enough for the market, at least for now.
