C*I
发帖数: 4736 | 1 http://www.marketwatch.com/story/fed-seen-cutting-interest-rates-to-0-soon-in-bid-to-help-weather-coronavirus-storm-2020-03-12?siteid=yhoof2&yptr=yahoo
Fed seen cutting interest rates to 0% soon in bid to help weather
coronavirus storm
Published: March 12, 2020 at 2:32 p.m. ET
By Greg Robb
Central bank using playbook that suggests being aggressive while it can,
former Fed staffer says.
To help the U.S. economy get through the coronavirus pandemic without too
much damage, the Federal Reserve is expected to follow its new crisis
playbook that calls on the central bank to be aggressive at the start of any
possible economic downturn.
Economists now see the Fed cutting its benchmark federal-funds interest rate
to zero percent quickly.
The Fed announced an emergency half percentage point cut in its policy
interest rate on March 3, and is expected to lower interest rates again at
its regular policy meeting next week.
Michael Feroli, chief U.S. economist at JPMorgan Chase, thinks the Fed will
cut to zero in coming days, possible even ahead of its March 17-18 meeting.
“Why save bullets at a time like this?” Feroli said.
After a half-point cut earlier this month, the central bank’s benchmark fed
-funds rate is now in a range of 1%-1.25%.
Michael Gapen, chief U.S. economist at Barclays, sees the Fed cutting its
policy rate by 1.0 percentage point on Wednesday next week.
“There is some risk it is forced to move in advance of the scheduled
meeting, but we believe the Fed still strongly prefers to avoid a second
emergency inter-meeting cut,” Gapen said.
Other economists think the Fed will take more time in getting to zero, with
a 50 basis point move next week and another in late April.
While the health-care response is more important than monetary policy in
combating the coronavirus, Feroli said that “everyone has a role to play.”
“The economy is going to weaken. The Fed can’t fold it’s hands,” he said.
.
Economists are now cutting their forecasts for U.S. economic growth this
year, and many expect contraction.
Given the stress in funding markets, the Fed is expected to offer additional
assistance to the financial system, economists said.
On Thursday the Fed announced it would inject more than $1.5 trillion into
short term funding markets to prevent volatile trading conditions from
leading to a sharp economic slump.
Read:Fed shifts policies to ease disruptions in Treasury financing markets
U.S. equity benchmarks plunged again on Thursday on fears about the
coronavirus. The Dow Jones Industrial Average DJIA, -9.98%sank by about 7.9%
, off its lows.
David Wilcox, a nonresident senior fellow at the Peterson Institute for
International Economics and a former Fed economist, said the central bank is
being guided by research from New York Fed President John Williams which
argues that the central bank “should dive aggressively” to hit the zero
lower bound once it believes interest rates will probably have to go to that
rate eventually.
The idea is that the Fed should get support to the economy before it gets
handcuffed, he said.
“Lots of members of the [rate-setting Federal Open Market Committee] have
read and subscribed” to the conclusions of this research, Wilcox said.
“The logic of that paper is informing at least some members” of the Fed,
he added.
Before this research, Fed officials favored the notion of “keeping their
powder dry” and wait until it was absolutely clear the economy was going to
be hit hard, Wilcox said. | l*********s
发帖数: 5409 | | f*********a
发帖数: 435 | | C*I
发帖数: 4736 | 4 possible even ahead of its March 17-18 meeting. | l******o
发帖数: 1 | 5 JPMorgan Chase
TMD 常常猜的准
我还以他们有内线
靠
估计今天他们在扫货 | c******n
发帖数: 5697 | 6 这个肯定priced in了跟今天那个1 trillon一样
问题是现在没空间降了，2008年有很大降息空间 | r**o
发帖数: 430 | | s******s
发帖数: 1793 | 8 没用，今天注入1.5T只是跳了一下，08年FED减息才是加速下跌的开始，呵呵。 | C*I
发帖数: 4736 | |
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