Fed Makes Surprise Inter-Meeting 50 Basis Point Rate Cut
Congrats to Jim Bianco for outright predicting this headline: Federal Reserve Cuts Rates by Half Percentage Point
The Federal Reserve cut its benchmark rate by a half percentage point on Tuesday morning, delivering a booster shot to stem potential economic disruptions from the spreading coronavirus epidemic with its first between-meeting move since the financial crisis.
Tuesday’s cut lowered the federal-funds rate to a range between 1% and 1.25%.
Fed Chairman Jerome Powell at a press conference following the rate cut said the central bank “judged that the risks to the U.S. outlook have changed materially” and that the Fed “can and will do our part, however, to keep the U.S. economy strong as we meet this challenge.”
“We do recognize a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain. We get that,” Mr. Powell said. “But we do believe that our action will provide a meaningful boost to the economy. More specifically, it will support accommodative financial conditions and avoid a tightening of financial conditions which can weigh on activity and will help boost household and business confidence.”
On Sunday, I commented Market Expects Emergency Rate Cut by the Fed on Monday Morning
Apologies offered. It was Tuesday morning.
Congrats to Jim Bianco who outright predicted this.
I few weeks ago I suggested the Fed was likely to do this but Bianco confidently predicted they would.
As noted yesterday, a Global Recession Now Baked in the Cake
Mike "Mish" Shedlock