The Fed just Slashed Rates

[Anonymous]

It seems the Federal Reserve slashed rates to zero today, so savings account rates will probably go down soon as well. Pretty big news given it is a Sunday. Here's my source:

https://www.cnbc.com/2020/03/15/federal-reserve-cuts-rates-to-zero-and-launches-massive-700-billion-...

[Anonymous]

Yikes! Thanks for sharing.

[VPExecutive]

Wonder how the stock market will react tomorrow. I think it'll tank some more as the pandemic hasn't been softened. 

[Anonymous]

Yeah I posted about this literally two minutes before you in the news section lol.

I think they were a bit premature... I mean the pandemic isn’t over and now the only place left to go is negative.

[Anonymous]

I totally forgot about the news section of the forum. Sorry, Mods!

My first thought went to savings account interest rates, as I noted. I really hate how the Fed has reacted, as I completely agree that they have spent all of their ammunition, so to speak. Negative rates now seem much more certain, unfortunately.

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@Anonymous wrote:
Yeah I posted about this literally two minutes before you in the news section lol.

I think they were a bit premature... I mean the pandemic isn’t over and now the only place left to go is negative.

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[CreditCuriosity]

Kinda sad imho..  Basically at 0% now, only place to go is negative and that is a BAD thing IMO hopefully the virus will move on quickly and can get those rates back up so we have ammunition for next crisis whenever that might be.  basically a 1.5% cut in what two or three weeks?  Crazy..  I still think it is like taking an aspirin for a cut type of approach as need to get rid of the virus and the economy market will recover as the economy as a whole is in good shape.  All i hope it the virus is gone sooner than later so the market and parts of the economy and schools etc can get back to normal...  Going to get worse before better, but as with anything it will pass with time, but getting the rate to increase as it will need to eventually is like pullig teeth and even after the virus passes wall street and companies will be use to cheap money and freak out of interest rate hikes in the future..  Quite a pickle we are in and the world in general is in.

[Anonymous]

While the news about the rate cut is still pretty fresh, and this could change if there are other developments, futures are looking pretty bleak:

https://www.cnbc.com/2020/03/15/traders-await-futures-open-after-fed-cuts-rates-launches-easing-prog...

[blindambition]

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@CreditCuriosity wrote:

Kinda sad imho..  Basically at 0% now, only place to go is negative and that is a BAD thing IMO hopefully the virus will move on quickly and can get those rates back up so we have ammunition for next crisis whenever that might be.  basically a 1.5% cut in what two or three weeks?  Crazy..  I still think it is like taking an aspirin for a cut type of approach as need to get rid of the virus and the economy market will recover as the economy as a whole is in good shape.  All i hope it the virus is gone sooner than later so the market and parts of the economy and schools etc can get back to normal...  Going to get worse before better, but as with anything it will pass with time, but getting the rate to increase as it will need to eventually is like pullig teeth and even after the virus passes wall street and companies will be use to cheap money and freak out of interest rate hikes in the future..  Quite a pickle we are in and the world in general is in.

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Yeah, I think this move came too soon. JMHO

[wa3more]

The market will discount the rate cuts and focus on the economic impact of the virus on growth and earnings....as it should. The market I think will continue lower because it hates uncertainty and earnings will be reduced.

the bond market is telling a more troubling story. And oil ? Might be good to pick up some cheap oil stocks, they have good yields too 

[mikesonthemend]

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@Anonymous wrote:

It seems the Federal Reserve slashed rates to zero today, so savings account rates will probably go down soon as well. Pretty big news given it is a Sunday. Here's my source:

https://www.cnbc.com/2020/03/15/federal-reserve-cuts-rates-to-zero-and-launches-massive-700-billion-quantitative-easing-program.html

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I disagree. There is a shortage of dollars. That is why all of our major credit card providers are advertising above normal savings rates. They are all looking for reserves (deposits). It has little to do with the domestic economy and everything to do with dollar demoniated loans in the emerging markets. The main thrust of Powell's comments were realted to getting more dollars off shore, thus the reintriduction of swaps with foriegn central banks.

The USD is in demand. The yen is a normal safe haven, right? Not a real sell off in the dollar at this moment.

Edit: Margin calls equate to sell what you can, in ill-liquid markets that means your winners. You would normally expect more USD sellers in this environment.