Complex Event Analysis - Report

Key Focus

  • If it ever is, she says, "I think the Fed is going to win out on that."
    'This is why the Federal Reserve was invented,'says former Fed Chairwoman Janet Yellen, 'to do emergency lending in a crisis.'
    Whether the economy stabilizes depends on many forces out of the Fed's control, including whether the coronavirus's spread slows, whether other authorities put in place testing and monitoring programs to tame it, and whether treatments and vaccines are discovered.
    The Fed said Monday it would expand a forthcoming program to provide financing to state and local governments squeezed by declining tax revenue
  • It also entered the crisis outside a partisan fray marked by distrust between congressional Democrats and the Trump administration, lawmakers and analysts say.
    Rapid Response
    Fed asset holdings have grown more sharply than during past quantitative-easing, or QE, periods, in which the Fed bought nearly $4 trillion in securities* to stimulate the U.S. economy
    Change in holdings since the start of each program
    *Treasurys, mortgage-backed securities and Fannie Mae and Freddie Mac debt
    Source: Federal Reserve Bank of St. Powell's measured response to President Trump's relentless attacks on him over the past two years have dispelled concerns among lawmakers that the central-bank chief would be a footman for the president or his re-election.
    "The Fed is not naturally suited to do this," says Douglas Holtz-Eakin, a Republican former director of the Congressional Budget Office, "but the Treasury is using the Fed as its arm because the Fed is better at setting up these facilities and getting the money out."
    Fed officials will hold a remote gathering Tuesday and Wednesday this week
  • She and former Fed Chairman Ben Bernanke say the Fed's independence would be more seriously imperiled if it didn't act boldly to protect the economy.
    "This is why the Federal Reserve was invented," says Ms. Yellen, "to do emergency lending in a crisis."
  • In that range, the portfolio would be twice the size reached after the 2007-09 financial crisis and nearly half the value of U.S. annual economic output.
    It would make its role in the economy far greater than during the Great Depression or World War II, according to Wall Street Journal calculations
  • Momentum supporting factors

  • (crisis, economy, fed)
  • (crisis, fed, federal_reserve)
  • (crisis, debt, fed)
  • (fed, world_war_ii)
  • (crisis, investment)
  • (bonds, crisis)
  • (bankruptcy, crisis)
  • Challenge supporting factors

  • (crisis, economy, fed)
  • (crisis, debt, fed)
  • (crisis, private-equity)
  • (debt, private-equity)
  • (crisis, fed, private-equity)
  • (fed, private-equity)
  • (crisis, markets)
  • (debt, markets)
  • (crisis, fed, markets)
  • (fed, markets)
  • Work-in-progress supporting factors

  • (congress, fed)
  • (crisis, economy, fed)
  • (fed, markets)
  • (crisis, markets)
  • (fed, risk)
  • (fed, world_war_ii)
  • (fed, rescues)
  • (fed, powell)
  • (fed, political)
  • (fed, policy)
  • Complex Event Time Series Summary - REPORT


    Time PeriodChallengeMomentumWIP
    Report79.01 10.97 10.03

    High Level Abstraction (HLA) combined

    High Level Abstraction (HLA)Report
    (1) (crisis,economy,fed)100.00
    (2) (crisis,debt,fed)41.12
    (3) (fed,markets)40.73
    (4) (congress,fed)39.99
    (5) (crisis,markets)33.31
    (6) (crisis,fed,federal_reserve)31.92
    (7) (crisis,private-equity)22.19
    (8) (debt,private-equity)22.16
    (9) (crisis,fed,private-equity)21.80
    (10) (fed,private-equity)21.63
    (11) (debt,markets)21.56
    (12) (crisis,fed,markets)21.34
    (13) (crisis,economy,lawmakers)20.85
    (14) (debt,lawmakers)20.49
    (15) (economy,lawmakers)20.45
    (16) (crisis,fed,lawmakers)20.28
    (17) (economy,fed,lawmakers)19.85
    (18) (crisis,economy,holdings)19.18
    (19) (crisis,economy,federal_reserve)19.03
    (20) (debt,holdings)18.79
    (21) (economy,holdings)18.75
    (22) (crisis,fed,holdings)18.64
    (23) (debt,fed)18.25
    (24) (economy,fed,holdings)18.18
    (25) (crisis,federal_reserve)17.54
    (26) (economy,federal_reserve)17.47
    (27) (economy,fed,federal_reserve)14.88
    (28) (crisis,debt)14.28
    (29) (clos,crisis)13.49
    (30) (clos,debt)13.42
    (31) (clos,crisis,fed)13.35
    (32) (bonds,crisis)13.35
    (33) (bonds,debt)12.78
    (34) (bonds,crisis,fed)12.71
    (35) (debt,wide-scale)12.22
    (36) (crisis,fed,wide-scale)11.75
    (37) (crisis,economy,vaccines)11.29
    (38) (economy,vaccines)11.22
    (39) (economy,fed,vaccines)10.12
    (40) (crisis,economy,trump)9.41
    (41) (debt,trump)9.23
    (42) (economy,trump)9.20
    (43) (economy,fed,trump)8.56
    (44) (crisis,economy,stabilizes)8.06
    (45) (economy,stabilizes)7.92
    (46) (economy,fed,stabilizes)7.42
    (47) (crisis,economy,revenue)6.89
    (48) (fed,world_war_ii)6.82
    (49) (economy,revenue)6.71
    (50) (economy,fed,revenue)6.39
    (51) (crisis,economy,republican)5.72
    (52) (economy,republican)5.50
    (53) (economy,fed,republican)5.22
    (54) (crisis,investment)5.01
    (55) (crisis,economy,re-election)4.55
    (56) (fed,risk)4.37
    (57) (economy,re-election)4.30
    (58) (fed,rescues)4.15
    (59) (economy,fed,re-election)4.05
    (60) (fed,powell)4.01
    (61) (fed,political)3.87
    (62) (fed,policy)3.73
    (63) (crisis,loss)3.52
    (64) (crisis,economy,quantitative-easing)3.37
    (65) (economy,quantitative-easing)3.09
    (66) (economy,fed,quantitative-easing)2.88
    (67) (debt,rescues)2.13
    (68) (crisis,economic-rescue)0.39
    (69) (bankruptcy,crisis)0.32
    (70) (debt,unemployment)0.04

    Complex Event Analysis - REPORT

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    Supporting narratives:

    • momentum (Read more)
      • She and former Fed Chairman Ben Bernanke say the Fed's independence would be more seriously imperiled if it didn't act boldly to protect the economy.
        "This is why the Federal Reserve was invented," says Ms. Yellen, "to do emergency lending in a crisis."
      • High Level Abstractions:
        • (crisis,economy,fed)
        • (crisis,fed,federal_reserve)
        • Inferred entity relationships (51)
        • (crisis,fed,holdings) [inferred]
        • (crisis,fed,targets) [inferred]
        • (crisis,fed,regrettable) [inferred]
        • (crisis,fed,negative) [inferred]
        • (crisis,fed,lawmakers) [inferred]
        • (economy,fed,governor) [inferred]
        • (fed,federal_reserve,governor) [inferred]
        • (crisis,fed,private-equity) [inferred]
        • (crisis,economy,vaccines) [inferred]
        • (crisis,fed) [inferred]
        • (economy,fed,re-election) [inferred]
        • (economy,fed,stabilizes) [inferred]
        • (crisis,fed,interpreting) [inferred]
        • (economy,fed,weather) [inferred]
        • (crisis,economy,federal_reserve) [inferred]
        • (economy,fed,policy) [inferred]
        • (economy,fed,federal_reserve) [inferred]
        • (economy,fed,holdings) [inferred]
        • (crisis,economy,republican) [inferred]
        • (fed,federal_reserve,solvency) [inferred]
        • (economy,fed,quantitative-easing) [inferred]
        • (crisis,economy,stabilizes) [inferred]
        • (crisis,fed,monetary) [inferred]
        • (crisis,economy,policy) [inferred]
        • (fed,federal_reserve,wage) [inferred]
        • (economy,fed,revenue) [inferred]
        • (fed,federal_reserve,growth) [inferred]
        • (crisis,fed,policy) [inferred]
        • (crisis,economy) [inferred]
        • (crisis,economy,holdings) [inferred]
        • (fed,federal_reserve,supervisory) [inferred]
        • (crisis,economy,re-election) [inferred]
        • (economy,fed,sir) [inferred]
        • (fed,federal_reserve,weather) [inferred]
        • (crisis,economy,lawmakers) [inferred]
        • (economy,fed,speech) [inferred]
        • (economy,fed,trump) [inferred]
        • (crisis,fed,wide-scale) [inferred]
        • (economy,fed,vaccines) [inferred]
        • (economy,fed,solvency) [inferred]
        • (crisis,economy,trump) [inferred]
        • (economy,fed,unemployment) [inferred]
        • (fed,federal_reserve,sir) [inferred]
        • (fed,federal_reserve,speech) [inferred]
        • (crisis,economy,revenue) [inferred]
        • (economy,fed,republican) [inferred]
        • (economy,fed,san_francisco_fed) [inferred]
        • (economy,fed,lawmakers) [inferred]
        • (crisis,economy,quantitative-easing) [inferred]
        • (crisis,fed,markets) [inferred]
        • (economy,fed,supervisory) [inferred]

    • momentum (Read more)
      • "That's one of the reasons we didn't make loans directly to municipalities in 2008."
        The central bank experienced awkward moments in the previous crisis managing assets it held due to its bailout of investment bank Bear Stearns Cos..including when it foreclosed on a shopping mall in Oklahoma City, owned loans on Hilton hotels in Hawaii and Puerto Rico, and sold a portfolio of debt on Red Roof Inn hotels after its bankruptcy.
      • High Level Abstractions:
        • (crisis,debt,fed)
        • (bankruptcy,crisis)
        • Inferred entity relationships (2)
        • (debt,fed) [inferred]
        • (crisis,debt) [inferred]

    • momentum (Read more)
      • In that range, the portfolio would be twice the size reached after the 2007-09 financial crisis and nearly half the value of U.S. annual economic output.
        It would make its role in the economy far greater than during the Great Depression or World War II, according to Wall Street Journal calculations. The portfolio had reached $6.57 trillion by April 22.
        "The Fed is being sent on a mission to places it has never been before," says Adam Tooze, a Columbia University history professor who writes about financial crisis and war
      • High Level Abstractions:
        • (fed,world_war_ii)

    • momentum (Read more)
      • "That's one of the reasons we didn't make loans directly to municipalities in 2008."
        The central bank experienced awkward moments in the previous crisis managing assets it held due to its bailout of investment bank Bear Stearns Cos..including when it foreclosed on a shopping mall in Oklahoma City, owned loans on Hilton hotels in Hawaii and Puerto Rico, and sold a portfolio of debt on Red Roof Inn hotels after its bankruptcy
      • High Level Abstractions:
        • (crisis,investment)

    • momentum (Read more)
      • "Our job is to meet the tests we are presented."
        Economists project the central bank's portfolio of bonds, loans and new programs will swell to between $8 trillion and $11 trillion from less than $4 trillion last year
      • High Level Abstractions:
        • (bonds,crisis)
        • Inferred entity relationships (1)
        • (bonds,crisis,fed) [inferred]

    • momentum (Read more)
      • Due to the financial and economic shocks caused by the virus, he says, central-bank officials "are being sucked into a series of entanglements that they cannot control and that they normally will not touch with a long pole, but this time felt they had to go in, and go in hard."
        Uncharted Territory
        The Fed's portfolio of bonds, loans and new programs will swell to $8 trillion-$11 trillion, economists estimate.
        Notes: Figures are as of year end, except final two
      • High Level Abstractions:
        • (bonds,crisis)
        • Inferred entity relationships (1)
        • (bonds,crisis,fed) [inferred]

    • challenge (Read more)
      • It also entered the crisis outside a partisan fray marked by distrust between congressional Democrats and the Trump administration, lawmakers and analysts say.
        Rapid Response
        Fed asset holdings have grown more sharply than during past quantitative-easing, or QE, periods, in which the Fed bought nearly $4 trillion in securities* to stimulate the U.S. economy
        Change in holdings since the start of each program
        *Treasurys, mortgage-backed securities and Fannie Mae and Freddie Mac debt
        Source: Federal Reserve Bank of St. Powell's measured response to President Trump's relentless attacks on him over the past two years have dispelled concerns among lawmakers that the central-bank chief would be a footman for the president or his re-election.
        "The Fed is not naturally suited to do this," says Douglas Holtz-Eakin, a Republican former director of the Congressional Budget Office, "but the Treasury is using the Fed as its arm because the Fed is better at setting up these facilities and getting the money out."
        Fed officials will hold a remote gathering Tuesday and Wednesday this week
      • High Level Abstractions:
        • (debt,fed)
        • (economy,fed,holdings)
        • (crisis,economy,lawmakers)
        • (economy,republican)
        • (economy,trump)
        • (debt,trump)
        • (crisis,economy,quantitative-easing)
        • (economy,fed,re-election)
        • (crisis,debt)
        • (debt,lawmakers)
        • (debt,holdings)
        • (economy,fed,lawmakers)
        • (crisis,fed,holdings)
        • (economy,fed,quantitative-easing)
        • (crisis,economy,fed)
        • (economy,fed,republican)
        • (economy,holdings)
        • (crisis,debt,fed)
        • (crisis,economy,re-election)
        • (crisis,fed,lawmakers)
        • (economy,re-election)
        • (economy,lawmakers)
        • (economy,fed,trump)
        • (crisis,economy,holdings)
        • (crisis,economy,republican)
        • (crisis,economy,trump)
        • (economy,quantitative-easing)
        • Inferred entity relationships (56)
        • (crisis,fed,holdings) [inferred]
        • (crisis,fed,targets) [inferred]
        • (crisis,fed,regrettable) [inferred]
        • (crisis,fed,negative) [inferred]
        • (crisis,fed,lawmakers) [inferred]
        • (economy,fed,governor) [inferred]
        • (crisis,fed,private-equity) [inferred]
        • (crisis,economy,vaccines) [inferred]
        • (crisis,fed) [inferred]
        • (economy,trump) [inferred]
        • (economy,fed,re-election) [inferred]
        • (economy,fed,stabilizes) [inferred]
        • (crisis,fed,interpreting) [inferred]
        • (economy,fed,weather) [inferred]
        • (crisis,economy,federal_reserve) [inferred]
        • (economy,fed,policy) [inferred]
        • (economy,fed,federal_reserve) [inferred]
        • (crisis,debt,fed) [inferred]
        • (economy,fed,holdings) [inferred]
        • (economy,lawmakers) [inferred]
        • (crisis,economy,republican) [inferred]
        • (crisis,economy,fed) [inferred]
        • (economy,trump,wealth) [inferred]
        • (economy,fed,quantitative-easing) [inferred]
        • (crisis,economy,stabilizes) [inferred]
        • (crisis,fed,monetary) [inferred]
        • (economy,trump,warning) [inferred]
        • (debt,fed) [inferred]
        • (crisis,fed,federal_reserve) [inferred]
        • (crisis,economy,policy) [inferred]
        • (economy,fed,revenue) [inferred]
        • (economy,quantitative-easing) [inferred]
        • (crisis,fed,policy) [inferred]
        • (crisis,economy) [inferred]
        • (crisis,economy,holdings) [inferred]
        • (crisis,economy,re-election) [inferred]
        • (economy,fed,sir) [inferred]
        • (crisis,economy,lawmakers) [inferred]
        • (economy,holdings) [inferred]
        • (economy,republican) [inferred]
        • (economy,fed,speech) [inferred]
        • (economy,fed,trump) [inferred]
        • (crisis,fed,wide-scale) [inferred]
        • (economy,fed,vaccines) [inferred]
        • (economy,fed,solvency) [inferred]
        • (crisis,economy,trump) [inferred]
        • (economy,fed,unemployment) [inferred]
        • (economy,re-election) [inferred]
        • (crisis,economy,revenue) [inferred]
        • (economy,fed,republican) [inferred]
        • (economy,fed,san_francisco_fed) [inferred]
        • (economy,fed,lawmakers) [inferred]
        • (crisis,economy,quantitative-easing) [inferred]
        • (crisis,fed,markets) [inferred]
        • (economy,fed,supervisory) [inferred]
        • (crisis,debt) [inferred]

    • challenge (Read more)
      • If it ever is, she says, "I think the Fed is going to win out on that."
        'This is why the Federal Reserve was invented,'says former Fed Chairwoman Janet Yellen, 'to do emergency lending in a crisis.'
        Whether the economy stabilizes depends on many forces out of the Fed's control, including whether the coronavirus's spread slows, whether other authorities put in place testing and monitoring programs to tame it, and whether treatments and vaccines are discovered.
        The Fed said Monday it would expand a forthcoming program to provide financing to state and local governments squeezed by declining tax revenue
      • High Level Abstractions:
        • (economy,fed,federal_reserve)
        • (economy,federal_reserve)
        • (crisis,economy,stabilizes)
        • (crisis,economy,federal_reserve)
        • (economy,vaccines)
        • (crisis,federal_reserve)
        • (economy,stabilizes)
        • (crisis,economy,vaccines)
        • (economy,fed,stabilizes)
        • (crisis,economy,fed)
        • (economy,fed,vaccines)
        • (crisis,fed,federal_reserve)
        • Inferred entity relationships (65)
        • (crisis,fed,holdings) [inferred]
        • (crisis,fed,targets) [inferred]
        • (crisis,fed,regrettable) [inferred]
        • (economy,stabilizes) [inferred]
        • (crisis,fed,negative) [inferred]
        • (crisis,fed,lawmakers) [inferred]
        • (economy,fed,governor) [inferred]
        • (economy,federal_reserve,supervisory) [inferred]
        • (fed,federal_reserve,governor) [inferred]
        • (crisis,fed,private-equity) [inferred]
        • (crisis,economy,vaccines) [inferred]
        • (economy,vaccines) [inferred]
        • (crisis,fed) [inferred]
        • (economy,fed,re-election) [inferred]
        • (economy,fed,stabilizes) [inferred]
        • (crisis,fed,interpreting) [inferred]
        • (economy,fed,weather) [inferred]
        • (crisis,economy,federal_reserve) [inferred]
        • (economy,fed,policy) [inferred]
        • (economy,fed,federal_reserve) [inferred]
        • (economy,fed,holdings) [inferred]
        • (economy,federal_reserve,weather) [inferred]
        • (crisis,economy,republican) [inferred]
        • (crisis,economy,fed) [inferred]
        • (fed,federal_reserve,solvency) [inferred]
        • (economy,federal_reserve,the_federal_reserve) [inferred]
        • (economy,fed,quantitative-easing) [inferred]
        • (economy,federal_reserve,governor) [inferred]
        • (crisis,economy,stabilizes) [inferred]
        • (crisis,fed,monetary) [inferred]
        • (economy,federal_reserve) [inferred]
        • (crisis,fed,federal_reserve) [inferred]
        • (crisis,economy,policy) [inferred]
        • (economy,federal_reserve,spillover) [inferred]
        • (economy,federal_reserve,suntrust) [inferred]
        • (fed,federal_reserve,wage) [inferred]
        • (economy,fed,revenue) [inferred]
        • (economy,federal_reserve,risks) [inferred]
        • (fed,federal_reserve,growth) [inferred]
        • (crisis,fed,policy) [inferred]
        • (crisis,economy) [inferred]
        • (crisis,economy,holdings) [inferred]
        • (fed,federal_reserve,supervisory) [inferred]
        • (crisis,economy,re-election) [inferred]
        • (economy,fed,sir) [inferred]
        • (fed,federal_reserve,weather) [inferred]
        • (crisis,economy,lawmakers) [inferred]
        • (economy,federal_reserve,speech) [inferred]
        • (economy,fed,speech) [inferred]
        • (economy,fed,trump) [inferred]
        • (crisis,fed,wide-scale) [inferred]
        • (economy,fed,vaccines) [inferred]
        • (economy,fed,solvency) [inferred]
        • (crisis,economy,trump) [inferred]
        • (economy,fed,unemployment) [inferred]
        • (fed,federal_reserve,sir) [inferred]
        • (fed,federal_reserve,speech) [inferred]
        • (crisis,economy,revenue) [inferred]
        • (economy,fed,republican) [inferred]
        • (economy,fed,san_francisco_fed) [inferred]
        • (economy,fed,lawmakers) [inferred]
        • (economy,federal_reserve,the_fed) [inferred]
        • (crisis,economy,quantitative-easing) [inferred]
        • (crisis,fed,markets) [inferred]
        • (economy,fed,supervisory) [inferred]

    • challenge (Read more)
      • By supporting junk bonds and CLOs, the Fed could be helping private-equity funds that made their portfolio companies vulnerable before the crisis with heavy debt burdens.
        "It does take a fair amount of work to think about all the incentives our facilities are creating," says were just above 2% when the Fed began lowering them in mid 2019, leaving it much less room to cut than in the past.
        Federal Reserve rate target
        Fed officials have concluded they need to offer broad support to corporate-debt markets to prevent credit from drying up and producing even more wide-scale bankruptcy and job loss
      • High Level Abstractions:
        • (clos,debt)
        • (clos,crisis,fed)
        • (clos,crisis)
        • (bonds,crisis)
        • (debt,private-equity)
        • (fed,private-equity)
        • (crisis,private-equity)
        • (bonds,debt)
        • (crisis,fed,private-equity)
        • (bonds,crisis,fed)
        • Inferred entity relationships (18)
        • (crisis,fed,federal_reserve) [inferred]
        • (crisis,fed,holdings) [inferred]
        • (fed,private-equity) [inferred]
        • (crisis,fed,targets) [inferred]
        • (crisis,fed,regrettable) [inferred]
        • (clos,crisis,fed) [inferred]
        • (bonds,crisis) [inferred]
        • (crisis,fed,negative) [inferred]
        • (crisis,fed,lawmakers) [inferred]
        • (crisis,fed,private-equity) [inferred]
        • (crisis,fed,policy) [inferred]
        • (crisis,fed) [inferred]
        • (crisis,fed,interpreting) [inferred]
        • (bonds,crisis,fed) [inferred]
        • (clos,crisis) [inferred]
        • (crisis,fed,wide-scale) [inferred]
        • (crisis,fed,markets) [inferred]
        • (crisis,fed,monetary) [inferred]

    • challenge (Read more)
      • It also will buy exchange-traded funds that invest in junk bonds, and it will provide financing to investors in business-loan funds known as collateralized loan obligations, or CLOs.
        Many private-equity funds added debt to their portfolio companies before the crisis in the junk-bond and CLO markets. By supporting junk bonds and CLOs, the Fed could be helping private-equity funds that made their portfolio companies vulnerable before the crisis with heavy debt burdens.
        "It does take a fair amount of work to think about all the incentives our facilities are creating," says were just above 2% when the Fed began lowering them in mid 2019, leaving it much less room to cut than in the past.
        Federal Reserve rate target
        Fed officials have concluded they need to offer broad support to corporate-debt markets to prevent credit from drying up and producing even more wide-scale bankruptcy and job loss
      • High Level Abstractions:
        • (crisis,markets)
        • (fed,markets)
        • (crisis,fed,markets)
        • (crisis,debt,fed)
        • (debt,markets)
        • Inferred entity relationships (15)
        • (crisis,fed,federal_reserve) [inferred]
        • (crisis,fed,holdings) [inferred]
        • (crisis,fed,targets) [inferred]
        • (crisis,fed,regrettable) [inferred]
        • (crisis,fed,negative) [inferred]
        • (crisis,fed,lawmakers) [inferred]
        • (crisis,fed,wide-scale) [inferred]
        • (crisis,fed,private-equity) [inferred]
        • (crisis,fed,policy) [inferred]
        • (crisis,fed) [inferred]
        • (crisis,fed,interpreting) [inferred]
        • (crisis,fed,monetary) [inferred]
        • (debt,fed) [inferred]
        • (fed,markets) [inferred]
        • (crisis,debt) [inferred]

    • challenge (Read more)
      • By supporting junk bonds and CLOs, the Fed could be helping private-equity funds that made their portfolio companies vulnerable before the crisis with heavy debt burdens.
        "It does take a fair amount of work to think about all the incentives our facilities are creating," says were just above 2% when the Fed began lowering them in mid 2019, leaving it much less room to cut than in the past.
        Federal Reserve rate target
        Fed officials have concluded they need to offer broad support to corporate-debt markets to prevent credit from drying up and producing even more wide-scale bankruptcy and job loss.
      • High Level Abstractions:
        • (bankruptcy,crisis)
        • (crisis,fed,wide-scale)
        • (debt,wide-scale)
        • (crisis,loss)
        • Inferred entity relationships (12)
        • (crisis,fed,federal_reserve) [inferred]
        • (crisis,fed,holdings) [inferred]
        • (crisis,fed,targets) [inferred]
        • (crisis,fed,regrettable) [inferred]
        • (crisis,fed,negative) [inferred]
        • (crisis,fed,lawmakers) [inferred]
        • (crisis,fed,private-equity) [inferred]
        • (crisis,fed,policy) [inferred]
        • (crisis,fed) [inferred]
        • (crisis,fed,interpreting) [inferred]
        • (crisis,fed,markets) [inferred]
        • (crisis,fed,monetary) [inferred]

    • challenge (Read more)
      • If it ever is, she says, "I think the Fed is going to win out on that."
        'This is why the Federal Reserve was invented,'says former Fed Chairwoman Janet Yellen, 'to do emergency lending in a crisis.'
        Whether the economy stabilizes depends on many forces out of the Fed's control, including whether the coronavirus's spread slows, whether other authorities put in place testing and monitoring programs to tame it, and whether treatments and vaccines are discovered.
        The Fed said Monday it would expand a forthcoming program to provide financing to state and local governments squeezed by declining tax revenue.
      • High Level Abstractions:
        • (crisis,economy,revenue)
        • (economy,revenue)
        • (economy,fed,revenue)
        • Inferred entity relationships (31)
        • (crisis,economy,policy) [inferred]
        • (economy,revenue) [inferred]
        • (economy,fed,governor) [inferred]
        • (crisis,economy,vaccines) [inferred]
        • (crisis,economy) [inferred]
        • (economy,fed,re-election) [inferred]
        • (economy,fed,stabilizes) [inferred]
        • (economy,fed,weather) [inferred]
        • (crisis,economy,federal_reserve) [inferred]
        • (crisis,economy,holdings) [inferred]
        • (economy,fed,policy) [inferred]
        • (economy,fed,federal_reserve) [inferred]
        • (economy,fed,holdings) [inferred]
        • (crisis,economy,re-election) [inferred]
        • (economy,fed,sir) [inferred]
        • (crisis,economy,lawmakers) [inferred]
        • (economy,fed,speech) [inferred]
        • (economy,fed,trump) [inferred]
        • (crisis,economy,fed) [inferred]
        • (crisis,economy,republican) [inferred]
        • (economy,fed,vaccines) [inferred]
        • (economy,fed,solvency) [inferred]
        • (crisis,economy,trump) [inferred]
        • (economy,fed,unemployment) [inferred]
        • (economy,fed,republican) [inferred]
        • (economy,fed,san_francisco_fed) [inferred]
        • (economy,fed,lawmakers) [inferred]
        • (economy,fed,quantitative-easing) [inferred]
        • (crisis,economy,quantitative-easing) [inferred]
        • (crisis,economy,stabilizes) [inferred]
        • (economy,fed,supervisory) [inferred]

    • challenge (Read more)
      • "That's one of the reasons we didn't make loans directly to municipalities in 2008."
        The central bank experienced awkward moments in the previous crisis managing assets it held due to its bailout of investment bank Bear Stearns Cos..including when it foreclosed on a shopping mall in Oklahoma City, owned loans on Hilton hotels in Hawaii and Puerto Rico, and sold a portfolio of debt on Red Roof Inn hotels after its bankruptcy. Alvarez says the Fed can be patient with assets that go bad because it doesn't have to answer to shareholders.
        The Fed's corporate-debt backstops have been extended to include so-called fallen angels, companies recently downgraded to junk status
      • High Level Abstractions:
        • (debt,fed)

    • challenge (Read more)
      • Ted Cruz (R., Texas) sent a letter to Mr. Powell asking the central bank to come up with ways to lend to oil-and-gas companies that have too much debt to qualify for existing Fed programs. Powell recently said the Fed's authorities wouldn't permit such rescues.
        Last month, Fed lawyers helped nix legislative language that would have had Congress explicitly directing the Fed to launch lending programs, according to people familiar with the negotiations
      • High Level Abstractions:
        • (debt,rescues)
        • (debt,fed)
        • (fed,rescues)
        • (fed,powell)

    • challenge (Read more)
      • The Fed successfully pressured the Truman administration to agree in 1951 to end that policy.
        Treasury and Fed coordination during World War II "was the right thing to do, but it was hard to undo," says Jeremy Stein, a former Fed governor who chairs Harvard University's economics department
      • High Level Abstractions:
        • (fed,world_war_ii)
        • (fed,policy)

    • challenge (Read more)
      • Many government policy makers, including past Fed critics, support its actions this time, though political calculations could change quickly.
        "This should be considered a very freakish Black Swan event, not anything that would be revisited under ordinary circumstances," says Sen. Pat Toomey (R., Pa.), who criticized the Fed after the last crisis for enabling large federal budget deficits
      • High Level Abstractions:
        • (fed,political)

    • challenge (Read more)
      • To stop a panic, Walter Bagehot said, a central bank should lend freely against good collateral at an interest rate a bit higher than normal.
        Brian Sack, the director of global economics at investment fund D.E. Shaw who ran the New York Fed's markets desk after the last crisis, says that might not be well suited for the moment
      • High Level Abstractions:
        • (crisis,investment)

    • challenge (Read more)
      • The Federal Reserve is redefining central banking.
        By Nick Timiraos and Jon Hilsenrath
        April 27, 2020 11:06 am ET
        By lending widely to businesses, states and cities in its effort to insulate the U.S. economy from the coronavirus pandemic, it is breaking century-old taboos about who gets money from the central bank in a crisis, on what terms, and what risks it will take about getting that money back.
        And with large-scale purchases of U.S. Treasury securities, the Federal Reserve is stretching the boundaries for what a central bank will do to finance soaring federal debt.actions that move it deeper into political decisions it usually tries to avoid.
        Fed leaders don't like doing any of this
      • High Level Abstractions:
        • (economy,federal_reserve)
        • (crisis,economy,federal_reserve)
        • (crisis,federal_reserve)
        • (crisis,debt)
        • Inferred entity relationships (23)
        • (crisis,economy,policy) [inferred]
        • (economy,federal_reserve,spillover) [inferred]
        • (economy,federal_reserve,suntrust) [inferred]
        • (economy,federal_reserve,risks) [inferred]
        • (economy,federal_reserve,supervisory) [inferred]
        • (crisis,economy,vaccines) [inferred]
        • (crisis,economy) [inferred]
        • (crisis,economy,holdings) [inferred]
        • (crisis,debt,fed) [inferred]
        • (crisis,economy,re-election) [inferred]
        • (crisis,economy,lawmakers) [inferred]
        • (economy,federal_reserve,speech) [inferred]
        • (economy,federal_reserve,weather) [inferred]
        • (crisis,economy,fed) [inferred]
        • (crisis,economy,republican) [inferred]
        • (crisis,economy,trump) [inferred]
        • (crisis,economy,revenue) [inferred]
        • (economy,federal_reserve,the_federal_reserve) [inferred]
        • (economy,federal_reserve,the_fed) [inferred]
        • (crisis,economy,quantitative-easing) [inferred]
        • (economy,federal_reserve,governor) [inferred]
        • (crisis,economy,stabilizes) [inferred]
        • (economy,federal_reserve) [inferred]

    • challenge (Read more)
      • By comparison, it bought about $85 billion a month between 2012 and 2014.
        Fed purchases help the government inexpensively finance its debt, which is soaring as the Treasury sends checks directly to households and spends more on unemployment insurance.
        The central bank is preparing a second wave, programs in partnership with the Treasury to get loans directly to companies and state and local governments
      • High Level Abstractions:
        • (debt,unemployment)

    • WIP (Read more)
      • In that range, the portfolio would be twice the size reached after the 2007-09 financial crisis and nearly half the value of U.S. annual economic output.
        It would make its role in the economy far greater than during the Great Depression or World War II, according to Wall Street Journal calculations
      • High Level Abstractions:
        • (crisis,economy,fed)
        • Inferred entity relationships (31)
        • (crisis,economy,policy) [inferred]
        • (economy,fed,revenue) [inferred]
        • (economy,fed,governor) [inferred]
        • (crisis,economy,vaccines) [inferred]
        • (crisis,economy) [inferred]
        • (economy,fed,re-election) [inferred]
        • (economy,fed,stabilizes) [inferred]
        • (economy,fed,weather) [inferred]
        • (crisis,economy,federal_reserve) [inferred]
        • (crisis,economy,holdings) [inferred]
        • (economy,fed,policy) [inferred]
        • (economy,fed,federal_reserve) [inferred]
        • (economy,fed,holdings) [inferred]
        • (crisis,economy,re-election) [inferred]
        • (economy,fed,sir) [inferred]
        • (crisis,economy,lawmakers) [inferred]
        • (economy,fed,speech) [inferred]
        • (economy,fed,trump) [inferred]
        • (crisis,economy,republican) [inferred]
        • (economy,fed,vaccines) [inferred]
        • (economy,fed,solvency) [inferred]
        • (crisis,economy,trump) [inferred]
        • (economy,fed,unemployment) [inferred]
        • (crisis,economy,revenue) [inferred]
        • (economy,fed,republican) [inferred]
        • (economy,fed,san_francisco_fed) [inferred]
        • (economy,fed,lawmakers) [inferred]
        • (economy,fed,quantitative-easing) [inferred]
        • (crisis,economy,quantitative-easing) [inferred]
        • (crisis,economy,stabilizes) [inferred]
        • (economy,fed,supervisory) [inferred]

    • WIP (Read more)
      • Last month, he helped advance the $2.2 trillion economic-rescue legislation in Congress that puts the Fed at the center of the government's economic-rescue efforts.
        Among risks the Fed is taking: that some programs won't work, that officials won't be able to unwind them, that politicians will grow accustomed to directing the central bank to fix problems its tools aren't designed to solve, and that public discontent about the central bank's choices will erode its authority over time.
        This last risk is prominent because the Fed's tools are better suited to helping large firms that borrow in capital markets than small ones that don't.
        "Capitalism without bankruptcy is like Catholicism without hell," Howard Marks, director of investment fund Oaktree Capital Management LP, said in a letter to shareholders this month, writing that "Markets work best when participants have a healthy fear of loss." Mr. Marks in a later interview said he didn't want to imply Mr. Powell's actions were wrong: "The fact that something can have negative, unintended consequences, doesn't mean it's a mistake."
        Mr. Powell defines the government's task from a different moral perspective
      • High Level Abstractions:
        • (fed,risk)
        • (crisis,loss)
        • (crisis,investment)
        • (fed,markets)
        • (congress,fed)
        • (crisis,markets)
        • (bankruptcy,crisis)

    • WIP (Read more)
      • Congress has armed the Treasury with $454 billion to work in cooperation with the central bank for the effort.
        The Fed will lend as much as 10 times the amount Congress appropriated, with the Treasury taking the first losses on loans that go bad.
      • High Level Abstractions:
        • (congress,fed)

    • WIP (Read more)
      • Powell recently said the Fed's authorities wouldn't permit such rescues.
        Last month, Fed lawyers helped nix legislative language that would have had Congress explicitly directing the Fed to launch lending programs, according to people familiar with the negotiations
      • High Level Abstractions:
        • (congress,fed)

    • WIP (Read more)
      • Instead, Congress provided money to the Treasury that the Treasury could use in collaboration with the Fed at the discretion of both.
        Mr. Toomey, who consulted with Fed officials during the negotiations, says he hopes Congress made clear such coordination was reserved for emergencies: "You have to be concerned about the precedents."
        The Fed's actions represent a level of cooperation with Congress and Treasury not seen since World War II. Back then, the central bank held down long-term interest rates to help finance war spending and the recovery
      • High Level Abstractions:
        • (congress,fed)
        • (fed,world_war_ii)

    • WIP (Read more)
      • "We need to make them whole to the extent we have the ability."
        'The Treasury is using the Fed as its arm,'says a former CBO director, 'because the Fed is better at setting up these facilities and getting the money out.'
        PHOTO: AL DRAGO/BLOOMBERG NEWS
        After cutting interest rates to near zero in mid-March, the Fed began a torrent of bond-buying programs to stabilize markets.
      • High Level Abstractions:
        • (fed,markets)

    • WIP (Read more)
      • "I'd be willing to take more credit risk than I would have before this situation," says Cleveland Fed President Loretta Mester, "because this is a huge, unprecedented, negative shock."
        The Fed's $600 billion Main Street Lending Program will be its most complicated task, current and former Fed officials say
      • High Level Abstractions:
        • (fed,risk)

    • WIP (Read more)
      • The Treasury will take the first $75 billion of any losses.
        One danger is that the Fed revives Wall Street, where its tools have been tested, while the Main Street program falls short, says Glenn Hubbard, a Columbia economics professor who was chairman of the Council of Economic Advisers under President George W. Bush.
        "I'm really worried it's not going to work," he says, noting that would be a reputational blow to the central bank.
        Unlike in the 2008 bailouts, where the Fed and Treasury turned profits on bank rescues, Mr. Hubbard says, officials shouldn't be concerned about recouping the Treasury's investment
      • High Level Abstractions:
        • (fed,rescues)

    • WIP (Read more)
      • Last month, he helped advance the $2.2 trillion economic-rescue legislation in Congress that puts the Fed at the center of the government's economic-rescue efforts.
        Among risks the Fed is taking: that some programs won't work, that officials won't be able to unwind them, that politicians will grow accustomed to directing the central bank to fix problems its tools aren't designed to solve, and that public discontent about the central bank's choices will erode its authority over time.
        This last risk is prominent because the Fed's tools are better suited to helping large firms that borrow in capital markets than small ones that don't.
        "Capitalism without bankruptcy is like Catholicism without hell," Howard Marks, director of investment fund Oaktree Capital Management LP, said in a letter to shareholders this month, writing that "Markets work best when participants have a healthy fear of loss." Mr. Marks in a later interview said he didn't want to imply Mr. Powell's actions were wrong: "The fact that something can have negative, unintended consequences, doesn't mean it's a mistake."
        Mr. Powell defines the government's task from a different moral perspective.
      • High Level Abstractions:
        • (fed,powell)

    • WIP (Read more)
      • It had initially said it would limit such purchases to counties of at least two million and cities of at least one million, in addition to the states.
        Political minefield
        The Fed has long seen lending to states and cities as a political minefield. Its initial population restriction for municipal borrowers has already invited blowback.
        In a letter to Mr. Powell this month, Rep
      • High Level Abstractions:
        • (fed,political)

    • WIP (Read more)
      • Final 2020 estimate is based on WSJ Survey of Economists'GDP forecast and the midpoint of analysts'balance-sheet estimate, $9.5 trillion.
        Many government policy makers, including past Fed critics, support its actions this time, though political calculations could change quickly.
        "This should be considered a very freakish Black Swan event, not anything that would be revisited under ordinary circumstances," says Sen. Pat Toomey (R., Pa.), who criticized the Fed after the last crisis for enabling large federal budget deficits
      • High Level Abstractions:
        • (fed,policy)

    • WIP (Read more)
      • To stop a panic, Walter Bagehot said, a central bank should lend freely against good collateral at an interest rate a bit higher than normal.
        Brian Sack, the director of global economics at investment fund D.E. Shaw who ran the New York Fed's markets desk after the last crisis, says that might not be well suited for the moment. Punitive rates implied by Bagehot might not be appropriate, and collateral is hard to size up in a mandatory shutdown
      • High Level Abstractions:
        • (crisis,markets)

    • WIP (Read more)
      • Many government policy makers, including past Fed critics, support its actions this time, though political calculations could change quickly.
        "This should be considered a very freakish Black Swan event, not anything that would be revisited under ordinary circumstances," says Sen. Pat Toomey (R., Pa.), who criticized the Fed after the last crisis for enabling large federal budget deficits. Last month, he helped advance the $2.2 trillion economic-rescue legislation in Congress that puts the Fed at the center of the government's economic-rescue efforts.
        Among risks the Fed is taking: that some programs won't work, that officials won't be able to unwind them, that politicians will grow accustomed to directing the central bank to fix problems its tools aren't designed to solve, and that public discontent about the central bank's choices will erode its authority over time.
        This last risk is prominent because the Fed's tools are better suited to helping large firms that borrow in capital markets than small ones that don't.
        "Capitalism without bankruptcy is like Catholicism without hell," Howard Marks, director of investment fund Oaktree Capital Management LP, said in a letter to shareholders this month, writing that "Markets work best when participants have a healthy fear of loss." Mr. Marks in a later interview said he didn't want to imply Mr. Powell's actions were wrong: "The fact that something can have negative, unintended consequences, doesn't mean it's a mistake."
        Mr. Powell defines the government's task from a different moral perspective
      • High Level Abstractions:
        • (crisis,economic-rescue)

    Target rule match count: 107.0 Challenge: 0.40 Momentum: 0.05 WIP: 0.05