$6 trillion injected into the economy by the Federal Reserve and Congress in response to the Coronavirus pandemic

 The apparent driver of the epic rally since the March 23rd low is the $6 trillion injected into the economy by the Federal Reserve and Congress in response to the Coronavirus pandemic. While Congress appears to have shut off the $ spigots, Federal Reserve Chairman Powell has implied that its resources are virtually unlimited, and the Fed will do what's necessary to support the market. Of course, this was catnip to speculators.

It’s easy to understand why prices for most higher-yielding asset classes have increased this year. The Federal Reserve’s bond buying (currently $150 billion a month) has tamped down long-term interest rates, while short-term rates are near zero, along with the federal funds rate. On Wednesday, Federal Reserve Chairman Jerome Powell said the central bank was “determined” to continue its “highly accommodative” policy until inflation rises to a consistent level of about 2%.

The Federal Open Market Committee released median projections Wednesday showing that inflation is expected to remain at or below 2% through 2023. That indicates no change in the central bank’s core policies for years.