The Briefing Room
General Category => Economy/Business => Topic started by: mystery-ak on March 15, 2020, 09:17:58 pm
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Fed cuts interest rates to zero percent, announces $700B in bond purchases
By Sylvan Lane - 03/15/20 05:11 PM EDT
The Federal Reserve on Sunday slashed interest rates to zero percent and announced it would purchases $700 billion in bonds and securities to stabilize financial markets and support the economy.
The emergency rate cut and push to flood the Treasury bond market with liquidity comes as the coronavirus pandemic forces businesses across the U.S. and world to shutter, likely plunging the global economy into a recession.
Developing
https://thehill.com/policy/finance/487692-fed-cuts-interest-rates-to-0-percent-announces-700b-in-bond-purchases
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Bkmk
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Bkmk
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Has this ever happened before?
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So the Fed has now adapted the quran's ban on interest charges...?
Will they loan me some, say about 500,000 for a nice country house...?
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Yeez. Glad we've just closed on our new house.
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Has this ever happened before?
Yes in Dec of 2008
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Stock futures plunge after Fed slashes rates to zero
By Sylvan Lane - 03/15/20 06:29 PM EDT
Stock futures plummeted Sunday evening after the Federal Reserve slashed interest rates to 0 percent and announced it would purchase at least $700 billion in bonds to stabilize financial markets.
Dow Jones Industrial Average futures projected a loss of 1,100 points when trading opens Monday morning, while S&P 500 and Nasdaq composite futures fell more than 4 percent, respectively.
The steep stock losses following the Fed's emergency intervention underscores the panic reverberating throughout financial markets and the broader economy over the toll of the novel coronavirus pandemic.
more
https://thehill.com/policy/finance/487698-stock-futures-plunge-after-fed-slashes-rates-to-zero
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S&P futures limit down.
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Federal Reserve panic is not a good look...billions in QE....billions in debt monetization (Fed buying Treasury bonds...i.e. "take out a new credit card to pay the old credit card(s)"). Reducing bank reserve requirements to zero, etc. etc.. Dow 30 futures not impressed...-1240 points 5% limit down.
https://www.cnbc.com/pre-markets/ (https://www.cnbc.com/pre-markets/)
https://www.investing.com/indices/us-30-futures (https://www.investing.com/indices/us-30-futures)
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The joys of printing your own money.
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The joys of printing your own money.
And buying your own debt with it...
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Throughout the entire history of the federal reserve, I cannot think of a single time where they were right about something.
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That's yet another three-quarters of a TRILLION dollars if anybody's keeping score....
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I estimated a $1.5 trillion deficit on the other thread ... before the additional spending. The fiscal crisis may arrive sooner than expected.
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That's yet another three-quarters of a TRILLION dollars if anybody's keeping score....
A trillion here, a trillion there, and pretty soon we're talking about real money.
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A trillion here, a trillion there, and pretty soon we're talking about real money.
Crazy, ain't it? And no hue and cry...
It boggles me.
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Crazy, ain't it? And no hue and cry...
It boggles me.
Wait until the bailouts begin. This will be chump change.
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Wait until the bailouts begin. This will be chump change.
I am pretty sure this administration has now officially outspent Obummer. And people wonder why I ain't cheering. :whistle:
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Wait until the bailouts begin. This will be chump change.
And a note to the Fed.... Good luck selling bonds to the public that make <1%.
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Wait until the bailouts begin. This will be chump change.
Yeah, but at least the Feds can print $$$$, I am more interested/worried about states/local...i.e. CA and others shutting down schools...teachers/staff going w/o pay for the time period? Highly doubtful....most likely "paid leave" which will add vast sums of money to state/local spending.....followed up by massive reductions in state income tax revenue due to a big drop in economic activity caused by all the shut-downs. At least the TP industry will see good times! ;-)
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And a note to the Fed.... Good luck selling bonds to the public that make <1%.
There's no need to sell bonds as long as the Fed is willing to issue fresh new money without limit. This has been our monetary policy since 2009.
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Yeah, but at least the Feds can print $$$$, I am more interested/worried about states/local...i.e. CA and others shutting down schools...teachers/staff going w/o pay for the time period? Highly doubtful....most likely "paid leave" which will add vast sums of money to state/local spending.....followed up by massive reductions in state income tax revenue due to a big drop in economic activity caused by all the shut-downs. At least the TP industry will see good times! ;-)
Are you kidding? The CA teachers/staff are very unlikely to go without pay. When things went south in 2008 essentially no government employees were laid off in CA. Obama's bail out money went to both state and federal employees so that they wouldn't take a hit like everyone else was taking. In addition most of them have guaranteed return retirement plans backed up by the taxpayers. While the rest of us with our 401k's massively dived. It was business as usual for them while everyone else was scrambling to survive and stuck with the long term bill.
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There's no need to sell bonds as long as the Fed is willing to issue fresh new money without limit. This has been our monetary policy since 2009.
The nice innocent sounding Quantitative Easing, QE...
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And buying your own debt with it...
Exactly. No country is buying our debt (treasuries) right now. None. We were too much in debt before this happened. Meanwhile ... I believe that China is elated. Could Chinese currency become the world's currency now?
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Well, that worked. The DJIA closed down just a couple of bucks short of 3,000 points. 9999hair out0000
All the FED did was spook a much broader range of investors.
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Well, that worked. The DJIA closed down just a couple of bucks short of 3,000 points. 9999hair out0000
All the FED did was spook a much broader range of investors.
Buy the rumor, sell the news.