“A global recession in response to a combination of a supply disruptions and a sudden stop of demand for (mostly) services appears to be a foregone conclusion.

“The Fed’s actions will help to restore an orderly functioning of the very core of the U.S. financial markets: the Treasury market and the U.S. mortgage market.

“All said, policy makers including the Fed are in the process of pulling all the stops to mitigate the severe economic and financial disruptions caused by the most severe global health crisis in more than a century. More will be needed and will likely be forthcoming over the next few weeks and months.”

Global Funding Squeeze
Ian Lyngen, head of U.S. Rates strategy at BMO Capital Markets:

“The coordinated action between the Fed/BoE/BoJ/ECB/SNB/Bank of Canada to lower the price on the central bank swap lines should help ease overseas funding stress by both reducing the cost of dollars for foreign banks, but also by adding the 84-day maturity option -- in addition to the 1-week currently. This should help reduce the probability of global funding squeeze -- whether it will be enough will be determined in the coming days.”

Targeted Lending
Krishna Guha, head of central bank strategy at Evercore ISI:

“Equity market futures continued to tumble following the announcement as he spoke. This troubling reaction likely reflects some combination of buy the rumor/sell the news from Friday, concern that the Fed has fired its bazooka and fiscal needs to step up too if this is to work, and missing elements on the liquidity/credit front.

“The Fed cannot do a lot about the first two but it can and should address the third. In our view the absence of TAF cash auctions and emergency 13(3) lending programs to shore up the credit markets starting with a CPFF backstop for commercial paper leaves the powerful package incomplete.”

Growth Shock
Jason Daw, a strategist at Societe Generale:

“In normal circumstances, a large policy response like this would put a floor under risk assets and support a recovery. However, the size of the growth shock is becoming exponential and markets are rightfully questioning what else monetary policy can do and discounting its effectiveness in mitigating coronavirus-induced downside risks.”