The Federal Reserve’s (Fed) announcement of a major expansion of lending programs initially had a positive impact on the markets this morning. The Fed noted that the purchases of Treasury and mortgage securities it approved last week are now basically unlimited, and the central bank will also purchase corporate and municipal debt for the first time. Actions like this confirm the Fed is dusting off former European Central Bank President Mario Draghi’s “Whatever it takes” strategy to help ensure financial stability by keeping credit flowing.
With this announcement in place, markets have now turned to the failed procedural vote on a stimulus package debated in the Senate. Stocks will remain highly volatile as Congress continues to work on a coronavirus bill, and investors adjust to the NYSE’s move to fully electronic trading for the first time. We continue to recommend that investors be disciplined with asset allocation and risk management, as people and businesses across the United States pull together to win the battle against the coronavirus.
We hope that you and your family stay healthy and safe during this unprecedented time.
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