Federal Reserve's US$3 trillion virus rescue inflates market bubbles

NEW YORK: The Federal Reserve's US$3 trillion bid to stave off an economic crisis in the wake of the coronavirus outbreak is fuelling excesses across US capital markets.

Here are some of the market bubbles that investors are attributing to the Federal Reserve's intervention.The Federal Reserve has not bought stocks as part of its financial stimulus programmes. But its near-zero interest rates and credit support for large swathes of Corporate America have driven yield-hungry investors back to the equity market.

"Why anyone would buy Nissans at Bentley prices is beyond me, but that's what happens generally with any sexy IPO. Sure the Nissan has 4 wheels and it's fine transportation, but is it worth a Bentley valuation?" said Richard Bernstein, chief investment officer at Richard Bernstein Advisors.The Fed's bond-buying programmes encouraged companies to tap credit markets and made the second quarter the busiest ever for debt issuance.

"Investment grade and high yield bonds had an incredible quarter in terms of issuance and performance. We just continue to see more and more money flow into those markets," said Ted Swimmer, head of capital markets at Citizen's Commercial Banking.

México Últimas Noticias, México Titulares

Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.

Federal Reserve's US$3 trillion virus rescue inflates market bubblesThe Federal Reserve's US$3 trillion bid to stave off an economic crisis in the wake of the coronavirus outbreak is fuelling excesses across U.S.
Fuente: ChannelNewsAsia - 🏆 6. / 66 Leer más »

China stock market on a roll; analysts warn of repeat of 2015 bubbleCHINA'S stock market is outperforming all its peers globally, fuelled by a relaxed monetary policy, an anticipated economic recovery and government assurance that stocks will keep climbing. Read more at The Business Times.
Fuente: BusinessTimes - 🏆 15. / 51 Leer más »

EMERGING MARKETS-Virus deaths hit Philippine stocks, others rise on China rebound hopesREUTERS
Fuente: TODAYonline - 🏆 1. / 99 Leer más »