Shock And Awe: Fed Cuts Rates To Zero, Announces $700 Billion In QE, Enhances Swap Lines

They didn't wait. Rather than risk being blamed for another two days of market turmoil ahead of the March FOMC decision, Jerome Powell delivered his own "whatever it takes" moment on Sunday evening. 'Mark it zero' In an extraordinary announcement that will echo for years to come, the Fed cut rates to zero and rolled out a raft of measures aimed at stabilizing not just US markets, but the global financial system more generally. "The coronavirus outbreak has harmed communities and disrupted ec

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15 thoughts on “Shock And Awe: Fed Cuts Rates To Zero, Announces $700 Billion In QE, Enhances Swap Lines

  1. Sadly, Mr President, interest rates are not the problem holding back the economy. The cuts will provide little support.

    But maybe they will help support stock prices!

  2. Do I hear short covering? Put monetization? The only thing that may have us revisit new lows is if the markets don’t bounce hard on Monday -then you’ll see real hysteria in the markets. Still these are good times for traders, and I’m hoping to put back on some puts when we’re way back above 3000 on the S&P. (volatility providing that is).

    1. Check the open in futures. Down 4% just a few minutes ago.

      At first blush, looks like another swing and a miss by Fed and Administration. #MAGA, bitches…!!!

      1. I’d say wait until Monday at 8:30 am before you draw any conclusions. Right now too many large trades are still being unwound, that’s the likely culprit. I’m not making any claims that the market is heading in either direction, but up is more likely than down. Given all the turmoil nothing would surprise me.

        It would be funny if the big players took all the Fed’s QE money and shorted it.

  3. FED has really spooked the markets. They did what they had to, cant be faulted for this. But the markets seem to have realized how bad the situation is. Oh well, that friday bounce was a big fat dead cat. Poor kitty.

  4. I’ve not seen anyone do the math on lost sales tax or room tax revenue for state and local governments. What do those vacant rooms in NYC and Florida mean for revenue?

    For that matter what about lost state and local income tax payments from non-existent wages during shut-downs?

    Some municipalities will be sorely tested when these revenues shrink. As with individuals and companies, many government entities live the equivalent of paycheck to paycheck. Check your muni portfolio. The Fed may need a bigger boat.

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