⏪ Federal Reserve Board Member Lisa Cook confirmed that the volatility seen in the markets last April following President Donald Trump's announcement of unexpected tariffs did not reach the level of "structural disruption" as it did during the COVID-19 crisis, but it was an important practical lesson for improving financial stability assessment tools.
⏪ Cook's statements came during the "Women in Macroeconomics" conference in New York, where she emphasized that U.S. Treasury bond markets, despite declining liquidity, continued to operate in an "orderly" manner, and that private debt markets did not face excessive pressure, even as investors rushed to sell government bonds widely.
⏪ Cook stated that what happened was a realistic example of how high asset valuations can turn into a source of sharp volatility when a sudden shock occurs, highlighting the importance of having flexible and stable funding channels that absorb those shocks and mitigate their impact.
⏪ Regarding the actual impact on the real economy, Cook pointed out that companies and investors expressed their concerns during earnings calls and meetings with the Fed about the likelihood of a slowdown in growth and rising inflation, which led to a state of anxiety in the markets, before those concerns began to recede since mid-April.
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