Omicron Showed that the Fed Put has been Re-struck Lower
The idea of the Fed put has been around for a while now. So much so that even the Fed as an institution has done research on it. The idea is fairly simple, there is a floor underneath equity prices where if they were to get to a certain level it would trigger a response from the Federal Reserve. I.e. if stocks fell too much, the Fed would react dovishly or add accommodation and stocks would eventually go higher again. This idea has been a structural tailwind to equity market valuations for over a decade. The Fed has had the markets back, either growth is good, or they would act. The question now is, to what extent is that still true, and did Powell just re-strike that put at a lower level or further OTM (out of the money)?