Credit Suisse Sees Funding-Strain Risk Without Fed Liquidity
- Global supply chain risks billions of unpaid bills: analysts
- Pozsar, Sweeney say steeper yield curve may starve money funds
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Disruptions to the global supply chain from the coronavirus have sparked the danger of funding strains that could be made worse by steep Federal Reserve interest-rate cuts, according to analysts at Credit Suisse Group AG.
“The supply chain is a payment chain in reverse,” Zoltan Pozsar, an investment strategist at the bank in New York, and economist James Sweeney wrote in a note Tuesday. “The biggest risk we see to the plumbing is the Fed cutting rates aggressively, without pledging an open-ended liquidity support through its balance sheet.”