With the Fed holding assets and injecting $297 billion in the last week alone to avert a contagion following the collapse of three banks last week, the central bank has reverted to quantitative easing.
The result is what observers say is a “Fed Put,” a phenomenon where the central bank intervenes and rolls out an accommodative policy whenever there are sharp price falls in the equity markets. Early this week, bank stocks crashed with widespread fears of bank runs should the Fed fail to intervene.
