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
Sunday, March 29, 2020
Read the article from Bloomberg about the US Federal Reserve's rapid, massive interventions to stabilize global financial systems.
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