Extraordinary Market Events: Implied and realized volatility in both stocks and bonds has ramped to levels not seen since the global financial crisis. Equity markets officially entered bear market territory, with key benchmarks down over 20% from mid-February highs. The entire US Treasury yield curve briefly traded below 1%, as the 10-year bond breached 0.40% and set all-time lows. Oil has fallen 48% year-to-date as a pricing war between Saudi Arabia and Russia compounds global demand concerns. Aggressive Monetary Policy Response: 2/28/20 – In a short statement, Chair Powell acknowledged how “the coronavirus (COVID-19) poses evolving risks to economic activity,”…

The Federal Reserve cut interest rates today by half percentage point amid concern the coronavirus outbreak could threaten the US economy.  It is the first emergency move like this since 2008. “The fundamentals of the U.S. economy remain strong,” a statement from the Federal Reserve said. “However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1‑1/4 percent.” It continued,…