Sunday, March 15, 2020

The Federal Reserve Goes Berserk


The Federal Reserve has cut its key interest rate a full percentage point to the 0.0% to 0.25% range.

This is a developing story. Return to this post for updates and detailed analysis.

UPDATE



In addition to cutting the Fed funds rate 100 basis points, the Fed said it would buy $700 billion in Treasury and mortgage-backed securities.

The Fed also said it is activating swap lines with five other central banks, including the European Central Bank and the Bank of England.

Most stunning it cut the rate on discount rate funds from 1.75% to 0.25%.

As I have warned in the EPJ Daily Alert, on the other side of the coronavirus panic, we are going to see a massive jump in price inflation. The Fed is pumping money into the system from every direction possible.

-RW


8 comments:

  1. Reserve requirements now zero as well.

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  2. Replies
    1. Hell, what if it *does*?

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    2. You misunderstand the purpose of the Federal Reserve. It was formed for one purpose - to protect and enhance its monopolistic power over the financial system. Its actions always work successfully toward this end...no matter the cost.

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  3. This is pretty extreme. Watch for those who end up saying the Fed should have "done more".

    Seems like they have spent up most of their headline ammo if this doesn't "work" I'm not sure what their plan is... feels like the panic keeps deepening and we should be very slow accumulating stocks for a bit longer

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  4. why the heck did silver and gold go down?

    ReplyDelete
    Replies
    1. Because they're paper gold and paper silver, perhaps?

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  5. Gold & silver crashed because overselling breeds more overselling. Buy as much as you can at these prices. Then wait.

    ReplyDelete