Viewpoint – May 2020
The recovery in markets which started in late March, following the massive interventions of the Federal Reserve in the US, and other major central banks, continued through April. This huge monetary stimulus, a combination of interest rate cuts (the only central banks not to cut have been those with rates
already at or below zero) together with asset purchases on a scale never before seen, unlimited in the case of the Fed, ECB and Bank of Japan, averted a deep and sudden shock to economic activity from triggering a systemic financial and liquidity crisis. Liquidity, funding and credit stresses eased rapidly and have largely normalised in the past month.