Risk off had attained powerful momentum globally back in July. De-risking/deleveraging dynamics were increasingly fomenting illiquidity, contagion and instability across global markets.
In the contemporary Fed view, the primary monetary policy transmission mechanism works through market expectations of the path of short-term policy rates. Read more.
The late-nineties U.S. “tech” Bubble was financed, at the margin, by high-yield debt (telecom, in particular), speculative hedge fund levered finance, and GSE liquidity. Read more.