There has been considerable discussion about the need for the Fed to lower interest rates. I do not want to get involved in that battle at this time. Instead, I have been shocked by the chart below concerning the "lender of last resort" Fed behavior. The numbers are outstanding. We thought that the Fed was active during the GFC; yet, if we look at the post-2020 period, we will see the Fed going to almost any length to support stability. The COVID response was overkill, but the First Republic response was on a different level. This may be internalized in the minds of investors, yet we cannot know with certainty what the Fed will do next time. There is moral hazard uncertainty, and this can be a problem.
from @greg_martis
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