Fed Finesse

With a stimulus bill to help small business, households and others probably not arriving until February, and its size likely to be relatively small, Covid-19 cases rising, and the spring 2020 stimulus wearing thin, the Fed is increasingly likely to step up. This will take the form of easing the terms of its Main Street lending program, buying more Treasuries (and specifically longer-dated Treasuries), thus driving down long-term rates.