Federal Reserve cuts rates by 50 basis points in face of coronavirus shocks

Fed Coronavirus Cut Analysis: Sell opportunity on stocks? Sugar rush cannot solve supply problem

Shock and awe – the Federal Reserve has cut interest rates by a double-dose of 50 basis points and triggered a stock market rally. The dollar immediately crashed while oil and gold surged.  It is a triple rarity: changing rates by a double-dose, doing it in an emergency move, and hardly providing any guidance. As Joseph Trevisani said, the Fed prefers being "more safe than sorry."  President Donald Trump has been pressuring the Fed, and he is surely pleased – but he may be in for a bitter surprise.  Read more...

Powell throws in the towel: Bears awake, it’s hunting season

The Fed has just announced a cut in the benchmark interest rate of 0.50, leaving the rate at 1%-1.25. After a G7 meeting that had left the market unsettled, the Fed announced a rate cut as a balm to calm nerves of investors… but were investors showing any nerves at all? The S&P 500 was moving comfortably above 3,000 points after yesterday's substantial gains. Read more...

Fed Cuts Rates 50 bps-Further Easing Likely in Store

The Federal Open Market Committee (FOMC) cut its target range for the fed funds rate 50 bps today. The timing of the move was a bit unusual, coming ahead of the next regularly scheduled FOMC meeting on March 18. But as we pointed out in a report we published on March 2, we expected that the Fed would be cutting rates in the near term. The decision to cut rates 50 bps today was unanimously supported by all ten voting FOMC members. In the statement that announced the rate cut, the FOMC said that the “fundamentals of the U.S. economy remain strong.” But it also noted that “the coronavirus poses evolving risks to economic activity.”  Read more...