Having announced an extension of its private bond-buying facilities earlier, the US Federal Reserve (Fed) recently offered another push toward restoring the investors’ confidence. Key quotes: The Federal Reserve Board on Monday announced it will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations.
Fed not thinking about raising rates, but stands ready to do more
FED'S LAST EMERGENCY MEASURES REVIEW
The Fed announced on Monday that it will start buying a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers. The SMCCF will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of US corporate bonds.
The US Federal Reserve announced on Monday that the Main Street Lending Program is now open for lender registration. "Participating main street lenders must register using the lender portal, which provides secure access and verification," the Fed added. "Business borrowers must apply for the main street loans through a participating lender."
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June Fed Decision Review
The bank has your back – that is the message from the Fed to investors. There are no signs of Fed fatigue – the commitment to support the economy remains strong and should boost stocks while dollar printing will likely keep the dollar down.
The Federal Reserve finally put numbers to the events and policies of the past three months issuing its delayed projection materials, forecasting that the US economy will contract 6.5% this year and unemployment will be 9.3% in December.
May Fed Decision Review
At yesterday's FOMC meeting minutes we saw that the Fed had been concerned about the unemployment picture. Jerome Powell has previously stated that unemployment in the US could hit 25%. The minutes from April's rate setting meeting also showed there is deep concern not just about the current state of the economy, but also what lies ahead.
The dollar has been gaining since Fed minutes dismissed the idea of negative US interest rates. Demand for the dollar has been bolstered by cooling market sentiment. The minutes are little stale since we've just heard fresher comments from Fed Chair Jerome Powell in his testimony to Congress this week.
APRIL FED DECISION REVIEW
"Whatever it takes" – that phrase belongs to then-European Central Bank President Mario Draghi, who lifted the euro from existential risk. Yet that is the message from the Federal Reserve as it takes stocks from its massive stimulus to mitigate the economic fallout from coronavirus.
In any event, the Fed remains the world’s most important central bank, and arguably the most important policymaking body when it comes to financial markets, so traders still tuned in for the latest economic assessment from Jerome Powell and Company.