Skip to comments.Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program
Posted on 03/15/2020 2:12:17 PM PDT by billyboy15
The Federal Reserve, saying the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States, cut interest rates to zero on Sunday and launched a massive $700 billion quantitative easing program to shelter the economy from the effects of the virus.
Facing highly disrupted financial markets, the Fed also slashed the rate of emergency lending at the discount window for banks by 125 bps to 0.25%, and lengthened the term of loans to 90 days.
The Fed also cut reserve requirement ratios for thousands of banks to zero. In addition, in a global coordinated move by centrals banks, the Fed said the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank took action to enhance dollar liquidity around the world through existing dollar swap arrangements.
The banks lowered the rate on these swap line loans and extended the period for such loans. Fed Chairman Jerome Powell is scheduled to hold a press conference via telephone at 6 pm eastern time. The actions by the Fed appeared to be the largest single day set of moves the bank had ever taken, mirroring in many ways its efforts during the financial crisis that were rolled out over several months.
The quantitative easing will take the form of $500 billion of treasuries and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment.
The Fed cut rates to a new range of 0% to 0.25% from 1% to 1.25% and said it would remain there until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.
(Excerpt) Read more at cnbc.com ...
Market behavior will be interesting tomorrow.
I thought the Fed was out to GET TRUMP!
Enough—or too frightening?
Oh, man! I wish I owned a major bank right now.
How can they possibly cut rates on a Sunday?
My 401 k has evaporated. I’ll be picking up pop cans before long.
Well Trump was talking about minus interest rates so this is a step.
Trump speaking about it now.
Well, the next step is to go negative, like other places.
A step to far for me that would be.
They are terrified of the Market on Monday.
Get ready for another round of inflation.
Before the last “quantitative easing,” a deli lunch cost $5.
A few years after it, the same lunch cost $10.
I imagine in a few more years, it will cost $20.
Trump on it now: he’s thrilled.
If you haven’t sold it will come back. If you’re holding any bonds they should do quite well.
I’m curious to see if these actions affect rates on car loans. My car is running fine, but it’s 15 yr old and has 140,000 miles on it. I wouldn’t mind at a all getting a final new car.
what’s next — negative interest rates? Good grief.
What is next? Negative Stock Prices?
Well, at least that will let some Stocks have a positive P/E ratio going forward.
Good thing there is no liquidity problem. Banks have all sorts of cash...at least thats what they said last week.
You can hear the hoof beats of the pigs running to wet their snouts.
It works, but only if you're in a deposit charging state.
This is probably aimed at the overseas futures markets, which I believe open this afternoon or evening.
Of course, this won’t help restore disrupted supply flows from China or compensate lost sales....
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