Expansive Fed response risks damaging market efficiencies, sources say

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Expansive Fed response risks damaging market efficiencies, sources say

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Chair of the Federal Reserve Jerome Powell testifies before the U.S. Senate Committee on Banking, Housing, and Urban Affairs at the United States Capitol in Washington D.C., U.S. on Wednesday, February 12, 2020. Credit: Stefani Reynolds / CNP/Sipa USA | CNP/SIPA USA/PA Images

The Federal Reserve reassured jittery markets on Wednesday that it is committed to using the full range of policy responses available to it in order to blunt the impact of the Covid-19 crisis, though some in the market fear that the central bank’s aggressive response will do longer term damage to market efficiency once the pandemic subsides.

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