By Eric Winograd
Conventional wisdom says the Fed is pretty much out of tools to support markets and an economy derailed by the coronavirus. But if things don't stabilize soon or if the fiscal response is too slow, we expect the Fed to take on broad fiscal-like authority to funnel liquidity into struggling businesses and households.
In an all-out effort to support markets, the Federal Open Market Committee ((FOMC)) recently cut its benchmark rate to zero, resumed quantitative easing ((QE)) and committed to pump several trillion dollars into overnight repurchase markets if necessary. Many assume