Vad skall driva börsen efter Q2?

Looking back at the GFC, the Fed cut rates 525bps between Sept ‘07 and Dec ’08, and then proceeded to take the balance sheet up by 4.25x relative to GDP over the following 5Y. As for the policy response to the current crisis, the Fed actually started lowering rates and increasing its balance sheet ~1Y ago, well before there were any signs of virus-related trouble. The ensuing rate cuts to 1.75% from 2.5%, and balance sheet increases from 17% to 20% of GDP, over the course of 2019 were tweaks to the Fed’s view for neutral/equilibrium levels. Since March, monetary stimulus has been comprised of 175bps in rate cuts and a 1.7x rise in the balance sheet (from 20% of GDP to about 33% of GDP). In the current crisis, rates have only fallen by about a third and the balance sheet has only expanded by about a sixth of the amounts they did during the GFC. As a result, there will be a lot more nontraditional easing coming down the pike (heavily increased asset purchases, YCC, NIRP, etc.) or we will almost surely find ourselves with a few unpleasant policy mistakes on our hands.