2A — May 15 - 28, 2020 — M id A tlantic Real Estate Journal WE FIX: CRAWLSPACES


M id A tlantic Real Estate Journal

M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Editor/Graphic Artist..... .................................Karen Vachon Contributing Columnists ............ Steve Hovland, Marcus & Millichap; Ronald Diskin, Ronald Diskin Associates Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 350 Lincoln St, Suite 1105, Hingham, MA 02043 USPS #22-358 | Vol. 32, Issue 9 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 | Fax: 781-740-2929 www.marej.com

Steve Hovland



Federal Reserve Delivers Aggressive Monetary Policy Early in Coronavirus Outbreak F ederal Reserve pulls all the levers to bridge U.S. economy through a global pandemic. The Fed- eral Open Market Committee (FOMC) unleashed its broad and sizable arsenal this week, highlighting the impact CO- VID-19 will have on the na- tional economy and the central bank’s willingness to be accom- modative early in the cycle to dampen an economic downturn. Nonetheless, an increase in unemployment claims and job cuts is unavoidable as a signifi - cant wave of retail, hospitality, travel and other parts of the consumer-based economy are shuttered. Congress is also undertaking dramatic efforts to minimize the consequences of job losses. Uncertainty sur- rounding the impact of these actions remains high, though little doubt remains on the will- ingness of the central bank to move far more quickly to prop up markets and the economy than during the early days of the Great Recession. In a decisive move, the

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Federal Reserve dropped the federal funds rate to be- tween 0 and 0.25% ahead of a regularly scheduled meeting. Decreasing the overnight rate to the “zero-bound,” where it rested for several years during the Great Recession, maximizes the use of one of the central bank’s tools to manage the global economic slowdown. The move is de- signed to maintain liquidity so financial markets do not freeze like they did in the last recession. The Fed leveraged another option in its toolbox as quantitative easing joined the rate cut to provide temporary support to the economy. The first action undertaken by the Fed was an injection of more

than $1 trillion of liquidity into the market by purchasing short-term Treasurys. When the Fed cut rates on March 15, it also included a $700 billion bond-buying round of quanti- tative easing. A total of $500 billion in Treasurys and $200 billion in mortgage-backed securities will be added to the bank’s balance sheet. Prior to the announcement, the Fed’s balance sheet was $4.3 trillion, down $200 billion from the $4.5 trillion level maintained through most of the recovery. The FOMC announced un- limited quantitative easing. In an effort to calm markets and soften the blow the U.S. econ- omy faces during the second continued on page 20A



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