Even though it's 1983 in light truck sales, it's not 1983 in Fed Funds ammo. The US is not struggling with a recession induced by a hawkish Fed but a recession on the way to depression after the Fed fired its last bullet and the Effective Fed Funds Rate at 0.23% plumbs the very bottom of the rate scale.
What's next? Bankruptcies!
As the recession deepens, companies go out of business left and right, defaulting on their bonds as they do. Fed flaccidity in the face of financial foundering is bound to show up in the corporate bond market as falling prices and rising yields as default risk rises.
Sea level returns to normal
At least the CD market has finally calmed down as government guarantees of liquidity calm the money markets.
Can the federal government bail everyone out? It can if it's willing to spend as many percent of GDP as after WWII. How big will New New Deal spending get? 5% of GDP? 10% or more?
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