The Fed is reducing its focus on exams to “minimize disruption and burden" on banks during the coronavirus crisis.
“We are now in QE infinity, again,” a CIO says after the Fed announced unlimited asset purchases in response to the coronavirus crisis.
The Fed will offer a liquidity backstop to ease funding pressures on large corporations amid the coronavirus outbreak.
"This is a full-blown crisis response operation, intended to make it abundantly clear that the Fed will not allow liquidity to dry up."
“You can’t rule out the 10-year going to 50 basis points. It’s just around the corner now."
The new buffer will use the results from the Fed's stress tests to help determine banks' capital requirements.
“We saw a risk to the outlook of the economy [from the coronavirus outbreak] and we chose to act," Fed Chair Jerome Powell says.
“Consumers shielded the economy from global headwinds for most of 2019 but they won’t prove immune to the coronavirus outbreak."
The 2020 tests will give the Fed "increased information on how leveraged loans and collateralized loan obligations may respond to a recession."
Significant net shares of banks expect performance to deteriorate in 2020 for both credit card and auto loans to nonprime borrowers, according to the Fed.
The CPI rose 2.1% in November on a year-on-year basis but the Fed "doesn’t expect inflation to sharply exceed its 2% goal anytime soon."
The sharp downward revision suggests inflation will continue to run below the Federal Reserve’s 2% target.
