The federal reserve have just announced today, Sunday 15th 2020 that they will cut interest rates to zero, and are joining forces with other central banks in a bid to prevent a severe economic downturn caused by the coronavirus pandemic.
The Financial Times reports:
After three weeks of chaotic drops in global stock markets and alarming signs of dysfunction in the US government bond market, the Fed stepped in with tools it has not used since the financial crisis.
The sweeping measures underscore the severity of the damage that the coronavirus has already caused to economic growth, and the threat the virus poses to financial stability. The Fed dropped its policy rate by a full percentage point to zero, a level not seen since 2015.
It also announced wide-ranging actions to support financial markets, including an additional $700bn in asset purchases, expanded repurchase operations, dollar swap lines with foreign banks and a credit facility for commercial banks to ease household and business lending.
The futures markets have reacted as you’d expect, dropping 5% upon opening on Sunday. We will have to wait till tomorrow to see just how the stock market reacts, but we are guessing it won’t be pretty.
We are in lockdown here at OYE.NEWS so we’ll keep you up to date with everything as it comes in over the coming days and weeks.
Stay safe and stay healthy.