Powell Floats "Fed Will Act As Appropriate" Rate Cut Message

Mish

Powell issued a rare inter-meeting statement promising to support U.S. economy.

At least one quarter-point cut is coming on March 18, as Powell signals Fed Ready to Cut Rates Despite Doubt They Can Fix Virus Fallout.

Fed Chairman Jerome Powell opened the door to a rate-cut at the Fed’s March 17-18 meeting by issuing a rare statement Friday pledging to “act as appropriate” to support the economy.

Powell’s intervention 90 minutes before the stock market’s close on Friday marked a sharp pivot from the previous message of policy makers that it was way too soon to judge the economic impact of the China-borne epidemic.

“We’re going to get infections here and there for quite a while,” said former International Monetary Fund chief economist Olivier Blanchard, who is now with the Peterson Institute for International Economics in Washington. “The economic cost may be large.”

One Cut or Two?

The only debate now is whether there would be one rate cut or two.

Prior to Powell's intervention message on Friday, I commented New Record Low Yields on 10- and 30-Year Bonds: Double Cut?

I expect a 50-basis point cut per my Friday point: "A quarter point cut would leave the 10-year treasury yield inverted with the Effective Fed Funds Rate by 16.3 basis points."

Mike "Mish" Shedlock

Comments (24)
No. 1-13
Stan88
Stan88

QE5 will keep us alive

Casual_Observer
Casual_Observer

The buying operations the Fed started already has started monetizing the debt. This is modern monetary theory by another name.

Zardoz
Zardoz

This will result in more money in the hands of giant corporations, that will use it to buy up the necessities of life at prices nobody else can afford, and then ration them to drive up the prices further. So... business as usual.

Greggg
Greggg

QE Infinity in progress.

Maximus_Minimus
Maximus_Minimus

It's good that the FED has led a prudent monetary policy, and has room to cut. I mean, there is way to go till absolute zero, when everything freezes. /s

tokidoki
tokidoki

QE + Hoax will power us through this.

Maximus_Minimus
Maximus_Minimus

Can we list the monetary/financial banking rules of the pre-2008 system that hasn't been cast aside due to one emergency or another? I believe, the list is very short. The FED/central banks own it all.

Carl_R
Carl_R

If the market is falling because interest rates are too high, this should solve it.

lol
lol

At least a point cut this week or we will test the 20,000 floor,no rate cut and we will see our first ever 2000 pt drop on Monday even with the PPT buyin up $300-400 billion in equities in one day!!!!!

Six000mileyear
Six000mileyear

The economy is doing just fine. Bottled water and toilet paper were cleared from the shelves, and checkout lines were long.

Carl_R
Carl_R

You can't push on a string.

Bohm-Bawerk
Bohm-Bawerk

Bond market is having fun tonight.

Runner Dan
Runner Dan

“Powell issued a rare inter-meeting statement promising to support U.S. economy (<---delete "economy" and substitute--->)stock market.”


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