Home 2020 Fed’s ‘Tool Box’ is Open if Need Be

Fed’s ‘Tool Box’ is Open if Need Be


#Fed #C19coronavirus #tools #asset #economy #aid #relief #stimulus #data #market #support #liquidity #lockdowns #consumers #uncertainty

Fed Vice Chairman Richard Clarida said officials would turn to additional forward guidance and asset purchases if the economy needs more aid.

We have a lot of accommodation in place. There is more that we can do. There is more that we will do if we need to,” the Fed’s VC said in a TV interview Tuesday.

In terms of extra tools, VC Clarida cited “additional forms of forward guidance that the Fed has used in the past and we would consider using in the future” as well as noting current Fed purchases of Treasuries and mortgages to support market functioning, while adding “there is more that we could do in terms of our balance sheet as needed.

Recent econ data has come in better than expected, including the addition of 4.8[M jobs in June. But a rise in C-19 coronavirus infections shows the risk of setbacks as the economy reopens from chaos lockdown.

We have seen an increase in cases in certain large states. We are not epidemiologists. We are following it closely,” he said, adding that a double-dip recession was not the Fed’s base-case outlook. “The course of the economy is going to depend on the course of the virus.”

Atlanta Fed boss Raphael said, “People are getting nervous again. Business leaders are getting worried. Consumers are getting worried. There is a real sense that this might go on longer than we had hoped and we had expected and we had planned for.”

Congress is debating more aid/relief/stimulus measures, which the White House is pushing for before the lawmakers’ August recess. .

If we do not get further fiscal support, things will not come back as well as they could,” Cleveland Fed President Loretta Mester said in a TV interview late Tuesday. With disruption from the virus lasting longer than expected, “this is a period where we need to be supporting both individuals and businesses who but for the pandemic would have been healthy,” she said.

Have a healthy day, Keep the Faith!

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