Global Financial System and the Abyss: Bloomberg

The United States, with more confirmed COVID-19 cases than other country in the world and a patchwork approach to testing and emergency closures, has not set a good example in slowing the disease's spread. On the other hand, the US Federal Reserve has led in preventing a global economic depression by applying massive, far-reaching and historic actions to ensure liquidity and stabilization. The central bank added more than $1 trillion to the system and plans to add at least $2.5 trillion more. “The effort underscores the main lesson policy makers learned from the 2008 experience: Act fast and go big,” reports Bloomberg. Rapid injection of funds into the system stabilized the US dollar, reduced credit risk and borrowing costs, and ensured smooth trading as countless investors seek to withdraw funds for the safety of cash. Millions of home, business, car, college and other loans will go unpaid for the next few months and that will bring job losses. Stresses remain, as some interventions require time and some investments will fail. The Federal Reserve cannot rescue all entities, already declining to support high-risk debt. Returning to a functioning economy could take a long time, and consumer and business priorities are sure to change. – YaleGlobal

Global Financial System and the Abyss: Bloomberg

As the United States struggles to slow spread of COVID-19, the Federal Reserve leads on stabilizing the global economy – consumers may reset priorities
Molly Smith, Alex Harris and Matthew Boesler
Sunday, March 29, 2020

Read the article from Bloomberg about the US Federal Reserve's rapid, massive interventions to stabilize global financial systems.


US Federal Reserve has increased assets on its balance sheet since Aug 2007
Source: US Federal Reserve)

Food, not home	4464 Food, not home	3459 Shelter	20091 Apprel/services	1866 Transportation	9761 Healthcare	4968 Entertainment	3226 Personal care	768 Education	1407 Contributions	1888 Insur/Pensions	7296 Other	2030
New habits? The average income of all US consumer units was near $79,000 for 2018 and average expenditures totaled about $61,000 - consumer priorities many change after the slowdown in economic activity due to COVID-19 (Source: US Bureau of Labor Statistics)

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