March 2020 Economic Recap
Short-term market liquidity improved over the back half of March and into the start of April, bolstered by a variety of Fed programs, a massive fiscal stimulus bill, and support from broker dealers. The Fed introduced a swath of new programs to support market functioning over the back-half of March, including but not limited to, money market and commercial paper funding facilities, foreign currency swap lines, and a secondary market bond purchase program. Funds continue to flow into government products, pushing the rate on Treasury bills below 0%, however spreads on high-grade credit products have tightened considerably from mid-March levels amidst lower market volatility.
Congress passed the $2 trillion CARES Act, the largest fiscal stimulus in modern history at roughly 10% of GDP. The bill extends aid through direct payments and expanded unemployment insurance to many struggling Americans, provides loans and grants to businesses, supports draining state funds and provides additional resources to in-need health-care providers. The package included $350 billion in loans to small businesses and $500 billion allocated in corporate aid.
For a deeper consideration of the economic data released during March, please follow the links below: