Posted on 03/15/2020 2:12:17 PM PDT by billyboy15
The Federal Reserve, saying “the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” cut interest rates to zero on Sunday and launched a massive $700 billion quantitative easing program to shelter the economy from the effects of the virus.
Facing highly disrupted financial markets, the Fed also slashed the rate of emergency lending at the discount window for banks by 125 bps to 0.25%, and lengthened the term of loans to 90 days.
The Fed also cut reserve requirement ratios for thousands of banks to zero. In addition, in a global coordinated move by centrals banks, the Fed said the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank took action to enhance dollar liquidity around the world through existing dollar swap arrangements.
The banks lowered the rate on these swap line loans and extended the period for such loans. Fed Chairman Jerome Powell is scheduled to hold a press conference via telephone at 6 pm eastern time. The actions by the Fed appeared to be the largest single day set of moves the bank had ever taken, mirroring in many ways its efforts during the financial crisis that were rolled out over several months.
The quantitative easing will take the form of $500 billion of treasuries and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment.
The Fed cut rates to a new range of 0% to 0.25% from 1% to 1.25% and said it would remain there “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
(Excerpt) Read more at cnbc.com ...
Treasuries should soar tomorrow.
Trump is best for addressing all this - not the Deep State or the Rats. I hope his supporters hold firm, and keep backing him!!
mañana
Our new illegals can fix that. Mañana
+1
This is probably aimed at the overseas futures markets, which I believe open this afternoon or evening.
Of course, this won’t help restore disrupted supply flows from China or compensate lost sales....
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Bloomber TV is showing stock futures + 9%
Numbers are moving so it looks like live trading today
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ok. That +9% looks like fridays close
Live futures just opened at 6:00 est & trading down abt 3% according to BBTV
Yup... this is a multiple administration, multi-decade, mismanagement problem — NOT Trump’s fault!!! Wondered if the house of cards would come down, this year, before the election. Debt levels are so high - I have been cringing, waiting, to see if DS would use this to hurt POTUS Trump. Maybe they (Trump and Treasury) can temporarily prop things up, “one more time” with additional “liquidity” (printed money), til they have the chance to work with Rand Paul and fiscal conservatives to right things - just don’t know....
OK, you made me search for it! Do you mean the "Hemline Index"? Pretty much the same as the "Miniskirt Index" I think...I found this:
You put it very well.
It’s as if they are all resigned to “kicking the can down the road”.
It keeps the Fed Gov't afloat and sending out checks to avoid the Torch and Pitchfork mobs?
I was just telling my wife what happened with the Fed.
She knows very little about how this works—this was not her “thing.”
She looked at me and said, “Isn’t that what they did in Venezuela?”
Kind of sums it up.
That's true. But also this is just a correction, and not based on any earnings changes other than the directly impacted stocks like airlines which were cut in half. They can muddle through on loans.
OTOH the worst case is that the economy needs complete restructuring due to permanent changes, lots of fatalities, etc. I don't think that is likely at all, but the markets would be critical for obtaining the capital to restructure.
Closing the markets would be akin to FDR's economic interventions. Those caused 10 years of off and on depression instead of a much quicker recovery.
Almost ALL restaurant fare is not on the Heart Healthy list.
It’s good entertainment otherwise.
It is an act of desperation and the malinvestment that you correctly point out will retard recovery the way low rates kept the economy from recovering quickly after 2008. I don't consider it outrageous at this point, but it has to be temporary otherwise it will be outrageous.
Is that you, Cramer? :-)
Well, with the rates going negative....they will go exponentially high. There is literally no limit.
That seems counter to what I've viewed with past rate cuts. If you're correct, then our bond funds and MMs/CDs should be fine. Having a hard time wrapping my brain around that belief.
I’ve thought stock prices were inflated to begin with. If they were too high, and come down to rational levels - is there really a loss, or just a restoration of reasonable prices and modest growth in line with reality - not QE pumping, debt monetization, and bank pressure-group’s manipulation!
I have to go find the guy who gave me shit last week when I said we would break 20,000 in the next week. Ok, it might take a week and a day.
Establish expectations and you will only be pleasantly surprised.
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