Wednesday, May 20, 2020

Federal Reserve Minutes May 20th, 2020

If you are seeking a complete complete copy of the Federal Reserve Minutes Bloomberg did a great job HERE.  Much of what the Federal Reserve is doing is to keep money and credit flowing as much as possible. It is more of an easing action. It should be noted that economic changes are based in many ways on buyer changes and perception of investors. While COVID was devastating in many ways it is also forced us to go through a period of adaptation and thinking about how to navigate change. The Federal Reserve provides a number of tools to avoid having things "lock down" because of credit. What we do see is that capital and many products are not moving because of temporary changes in work situations and demand. People are likely going to start working again soon based on necessity and that may free up and get financial systems moving again.

As long as we think of this as a short-term crisis the economy will bounce back when things get back to "normal". The longer the disease sticks around and we have changed our way of life the more likely it will have a longer term impact on our economy.

A couple of notes from the minutes:  Discussion on unemployment, improved real residential investments, volatility in trading, dollar as safe haven, tight commercial lending, large banks ok, business activity and investment decline, low energy decline, concerns temporary layoffs could become permanent, foreign economy decline, continue to purchase Treasury securities and agency RMBS and CMBS in the amounts needed to support smooth market functioning, etc...


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