FT Letter: The faultlines of the crisis are complex and varied

Today my letter in the FT responds to Martin Wolf’s “Coronavirus crisis lays bare the risks of financial leverage, again.”  Martin clearly highlights segments in capital markets creating fragilities before the recent shock.

The role of central bank policy distorting incentives in 2019 was absent.  Skewed investing incentives began on December 18, 2018 – when the FOMC statement misread the global economy and markets and balance sheet expansion resumed.

“The faultlines of the crisis are complex and varied”
https://www.ft.com/content/48e41d0c-8bb4-11ea-a01c-a28a3e3fbd33

For more on Fed policy and markets after December 18, 2018 – see pages 5-6 of my Boston Economic Club remarks
http://centerforfinancialstability.org/speeches/BEC_Now_What_031820.pdf