NEW YORK (Reuters) - The U.S. Federal Reserve cut interest rates on Tuesday in an emergency move designed to shield the world’s largest economy from the impact of the coronavirus.
In a statement, the central bank said it was cutting the fed funds rate half a percentage point to a target range of 1.00% to 1.25%.
HIGHLIGHTS:
STOCKS: The S&P 500 seesawed, spiking, then falling and was last up 0.19%
BONDS: The 10-year U.S. Treasury note yield, spiked then turned lower was last at 1.0945%; The 2-year note yield fell to 0.7878%
FOREX: The US dollar index =USD was down almost half a percent
COMMENTS:
PETER KENNY, FOUNDER, KENNY’S COMMENTARY LLC AND STRATEGIC BOARD SOLUTIONS LLC IN NEW YORK
“The rate cut underscores the magnitude of the problem that the global economy is facing. It magnifies the problem that coronavirus presents to markets.”
“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.”
MARK MCCORMICK, GLOBAL HEAD OF FX STRATEGY, TD SECURITIES, TORONTO
“This is definitely not good for the dollar. The Fed is reducing the cost of carry.”
“The question is, which countries have room for fiscal stimulus, and the U.S. does not in an election year. At the same time, there are not many central banks that can follow the Fed’s lead and take rates lower.”
CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, INDEPENDENT ADVISOR ALLIANCE, CHARLOTTE, NC
“Clearly the Fed doesn’t want to fall behind the curve. They’re trying to be proactive and front-load their response both by cutting 50 bps instead of their usual 25 bps as well as by cutting intra-meeting instead of waiting until later this month.”
ALAN LANCZ, PRESIDENT, ALAN B. LANCZ & ASSOCIATES INC, TOLEDO, OHIO
“I think it spooked investors after the strong rebound, because it was made right away and it was 50 basis points. So it was larger than people (were expecting), and some may be thinking, ‘Ooh, are things worse than we think?’”
MICHAEL PURVES, CHIEF EXECUTIVE, TALLBACKEN CAPITAL ADVISORS, NEW YORK
“(The impact of the rate cut) remains to be seen, in the immediate term it is helping the markets. There are two major questions – what conditionality comes with this. Suppose the virus news gets better in April do they hike back? Or is it the elevator down, staircase up. Or maybe there’s no staircase up.
“I don’t quite understand the logic of the rate cut, it does obviously help reduce the cost of capital and helps mortgage rates, etc. But what is important is not that you have low interest rates on your screen,” but that credit conditions are robust for the people that need it.
“The things I’m watching closely is if the markets don’t really embrace this 50 bps cut, if the equity market says: ‘Oh ok, so what? It isn’t a vaccine,’ then I think there is a case to made that volatility will be supported at higher levels. I’ll watch high yield credit spreads and equity prices and the VIX.”
WILLIE DELWICHE, INVESTMENT STRATEGIST, BAIRD, MILWAUKEE
“It seems like an odd time to do it after yesterday’s bounce. It doesn’t do anything for the economy, but I think it probably helps the markets. The import of it is a messaging that we are in control and maybe everyone should settle down. The risk is the market shrugs it off.”
JUSTIN LEDERER, INTEREST RATE STRATEGIST, CANTOR FITZGERALD, NEW YORK
“I’m a little surprised. I didn’t expect that at 10 O’clock today, I thought you’d see something coordinated among central banks. The biggest takeaway from here is the steepening of the curve, the 2s/10s jumped almost 7 basis points. It’s a big, big steepening here… I’m surprised that it’s today. I’m not surprised that they went, but I thought it would be more of a coordinated and not out of the blue at 10 O’clock.”
Compiled by Alden Bentley
"impact" - Google News
March 03, 2020 at 10:28PM
https://ift.tt/2VHyFY4
Instant View: Fed announces surprise rate cut to counter coronavirus impact - Reuters
"impact" - Google News
https://ift.tt/2RIFll8
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Instant View: Fed announces surprise rate cut to counter coronavirus impact - Reuters"
Post a Comment