Fed’s Kaplan: Rate cut is not about current stock market
Dallas Fed President Robert Kaplan crossed wires during early Asian morning on Friday. The Fed policymakers joined the league of FOMC members to turn down the scope of any further rate cuts, at least in the current month, which the markets are anticipating amid coronavirus fears.
Key quotes
The situation around coronavirus (COVID-19) has changed pretty meaningfully over the last couple of weeks.
Fed's rate cut move can help offset tighter financial conditions.
Fed's rate cut is not about the current stock market. It is about mitigating tightening that may take place weeks from now.
Normal economic data that we are used to relying on is not very useful.
Companies say they have come to grips to some extent with the supply aspect of coronavirus effect.
FX implications
The coronavirus-led risk aversion continues to dampen market sentiment and increases the burden on the global policymakers, including the Fed, to act. As a result, traders paid a little heed to the Fed policymaker’s comments that tried to placate traders.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
