FXStreet reports that economists at JP Morgan Asset Management apprise the Fed’s options for additional stimulus are limited, and each comes with a set of complications that challenge their viability.
“An overhaul of regulatory conditions: Current liquidity requirements and a ban on proprietary trading prevents banks from supporting credit markets; adjustments to these rules could ease conditions. However, regulatory reform is a slow process and unlikely in the near-term.”
“A broadened policy remit: Negative interest rates or an expanded asset purchase program by which the Fed can purchase corporate bonds. Such changes would likely require Congressional approval.”
“A targeted lending program: Additional support for virus-impacted small and medium-size firms. Future lending programs will require additional support from and coordination with the U.S. Treasury.”
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