Yield-curve control is in effect: The US suffers the most spectacular labour market shock ever 2 weeks back to back and Treasury yields barely quiver. Why? Because, Fed is buying the market at an astonishing rate! @BChappatta
People need to understand that the Fed has unlimited firepower to stimulate aggregate demand (AD) if it is willing and allowed to use it. (See ) After the induced economic coma is over, there is a chance very deep rate cuts will be needed go get AD right.
"In response to the COVID-19 crisis, the Fed has already cut the interest rate on reserves to 0.10 percent, but it should cut the rate to zero before engaging in more QE."
Fed's Daly says goal is to make jobless rate spike temporary: CNN
IFDP 2020-1276: Sovereign Risk Matters: The Effects of Endogenous Default Risk on the Time-Varying Volatility of Interest Rate Spreads via Fed