Market Update - April 14, 2020

Recent Policy Actions
New U.S. Federal/Fiscal Programs
As of this writing, there have been no new fiscal programs enacted since the Phase 3 CARES Act on March 27. Congress spent a portion of last week debating an expansion of the CARES Act. The Senate finished the week at an impasse, attempting to add $250 billion to the Paycheck Protection Program (PPP). Democrats sought more money for hospitals and state and local governments in exchange for passing a Republican proposal for more small-business loan funding.

New Monetary Programs
The Federal Reserve brought additional fire power to support credit markets and the economy last week. The announcement reaffirmed its strong commitment to use any and every tool at its disposal to address the crisis and reduce borrowing costs. While some market participants are concerned over the “moral hazard” of constantly supporting financial markets, others believe that the pandemic is an unexpected global demand shock that policy makers should attempt to mitigate using every tool at their disposal. The consequences of this support will be long lasting as the Fed balance sheet approaches an estimated $11 trillion.

This is the fourth in our series of market updates on the impact of Coronavirus. If you have missed the earlier update, please reach out to to receive back issues and to be added to the distribution list.