The market is taking the Fed news as a sign that the Powell put is still on

Last week Powell was very clear that the Fed would "act forcefully, proactively and aggressively."

 

The threat of another day of declines in stocks showed just how eager they are to pull the trigger.

In a garbled release that only emphasizes how political the Fed has become, the Fed announced they will buy corporate bonds, including new issues. This means you can sell corporate debt, so long as it wasn't junk before March 20 -- directly the the government.

 

Alone, this doesn't change that much. The Fed isn't buying any more bonds than it was before and the initial announcement said they would eventually do this. This will allow them to act more aggressively if ETF unit creation lags. It's entirely possible that the Fed felt the ETFs were being front-run and wanted more flexibility.

 

The reason for the change now are unclear and this looks like another Fed rescue and the market is eating it up.

 

Either that or this market is filled with noob retail traders who hear the words 'fed buying' and grab whatever options they can get.

 

Reprinted from Forexlive，the copyright all reserved by the original author.