The Federal Reserve gave into Trump's screaming of DO SOMETHING and cut interest rates by a half-point today, and the markets immediately took it as a sign that markets are now somewhere between "unrestrained panic that Trump in charge during a pandemic" and "Is it 2008 again?"
The U.S. Federal Reserve cut interest rates on Tuesday in an emergency move to shield the world’s largest economy from the impact of the coronavirus, as Group of Seven finance officials pledged unspecified “appropriate” policy moves.
The Fed said it was cutting rates by a half percentage point to a target range of 1.00% to 1.25%. The decision was unanimous.
“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” it said in a statement.
President Donald Trump said a half point cut was not enough.
After a record 1,200+ point rise Monday, the Dow basically gave most of that back Tuesday.
Stocks had initially jumped more than 1%, but then dropped as traders worried whether pumping more money into financial markets would address the central problem - a drop in business activity as workers and consumers stay home.
“The rate cut underscores the magnitude of the problem that the global economy is facing,” said Peter Kenny, founder of Kenny’s Commentary LLC and Strategic Board Solutions LLC in New York.
“Normally, markets would welcome a rate cut, and they were hoping for it. Now that we’ve got it, the question is, what’s next?”
The 10-year Treasury yield fell below 1% for the first time ever as nervous investors moved money out of the stock market.
The S&P financials index tumbled 3.7%, reflecting banks’ difficulty in making profits in low-interest rate environments.
Wall Street on Friday had its biggest weekly decline in more than a decade as growing cases of the flu-like virus outside China fanned fears of a global recession.
The reality is setting in that the Trump regime will not only not be any help at the federal level against COVID-19, but that Trump himself will continue to spread misinformation in order to cover his own ass.
No wonder then the markets are in freefall with the death toll up to nine and growing.