The Fed is warning of several risks to the economic recovery process including damaged labor market dynamics and the potential for a long and deep recession.
Don’t underestimate COVID-19 and the global scale of the economic crisis.
We see the risks for stocks as tilted to the downside and expect a correction lower driven by a rotation out of the mega-cap tech leaders.
The FOMC met this week for its first Fed funds interest rate decision since the two emergency cuts in March. As expected, the policy rate was left unchanged at 0% with the markets focusing more on the various relief measures in response to the coronavirus pandemic and now looking ahead towards the economic rebound.