Fed Drop Rates To Zero To Stimulate The Coronavirus Economy
BREAKING NEWS: Fed Drop Rates To Zero To Stimulate The Coronavirus Economy
- However, the futures markets did not take the news of the stimulus as a positive
- Future markets plummeted and trading halted
- What this means is the Dow Jones Industrial Average and other equity markets will open lower Monday morning
- Many states like Illinois and New York now have shut down schools
- Illinois Governor J.B. Pritzker has ordered all restaurants and bars closed effective tomorrow March 16th through March 30th
- Other states like New York have closed schools, restaurants, and bars
- Professional sports have been halted
- The NBA, NHL, and MLB, as well as professional golf, has been halted for at least 30 or more days
- Many employers are ordering workers to either work from home or put them on indefinite furloughs until further notice
- Many consumers are stockpiling food and water in case the coronavirus pandemic lasts for some period of time
- The Trump Administration is doing everything in its power and humanly possible to keep the public aware of what is going on
- As the pandemic continues, the economic impact is devastating, not just in the US but globally
In this breaking news article, we will discuss and cover Fed Drop Rates To Zero To Stimulate The Coronavirus Economy.
News Of The Fed Drop Rates To Zero Plummet US Stock Futures
Stock futures have tanked Sunday prior to hitting the trading curb on news the Federal Reserve Board lowered interest rates to 0.0% to 0.25% in an emergency coronavirus stimulus move. The Fed lowered interest rates to lessen the worries to investors and Wall Street over the coronavirus pandemic. Unfortunately, the stock markets were not impressed and stocks plummeted lower hitting the limit-down trading curb, thus halting trading. The limit-down trading curb circuit breakers will halt trading when the markets plummet at 5.0%. The market drop was triggers hours after the Fed cut its benchmark interest rate to 0.0% to 0.25%.
Economic Impact From The Coronavirus Pandemic
The issue with the coronavirus is there is no cure nor a vaccine. It will take 12 to 18 months for a vaccine is developed. The spread and death rate of the coronavirus is alarming. It is a global virus affecting all countries including the United States. As the pandemic spreads, the economy is being impacted. Many states are ordering businesses, churches, schools, and other places to be shut down. Professional sports leagues have halted spring opening until further notice. Illinois Governor J.B. Pritzker has ordered all restaurants and bars closed effective tomorrow until March 30th. The economic toll is beyond devastation for consumers, employers, businesses, and government agencies. As time passes, there are increasing numbers of new cases. Death toll numbers are rising daily at alarming rates. Many homebuyers and homeowners are worried about a 2020 housing market crash. Home prices have been skyrocketing for the past several years. The housing market had a bull-market housing boom for 11 years. Will the coronavirus pandemic trigger another 2008 real estate housing bubble? Will we have another 2008 financial crisis?
What Does The Market’s Reaction To The Fed Drop Rates To Zero
The US Stock Futures dropping more than 5.0% on Sunday after news the Fed Drop Rates To Zero means Wall Street and the financial markets were not impressed with the emergency Fed stimulus actions over the coronavirus pandemic. The Federal Reserve Board announced the emergency interest rate cut to zero in a move to offset the negative economic impact from the deadly widely spreading pandemic. Other markets like the S&P 500 plummeted 5% before triggering halting trading. The Federal Reserve Board announced it will be increasing its bond holdings by over $700 billion. The Fed will also be reducing its reserve requirement ratios to 0.0%.
Michael Gracz of Gustan Cho Associates has been following the impact of coronavirus pandemic on the stock and mortgage markets.
As of 6,55 PM EST on Sunday, the financial markets were as follows:
- The Dow Jones Industrial Average was trading down 1,041 points or down 3.8% at 21,947 or down
- The Nasdaq Composite was down 4.5% or at 7,556
- The S&P 500 was down 4.8% to 2,567.60
The US Stock Futures Markets is a good reflection of what the markets will open during normal trading hours. This is a developing story. Stay Tuned!!!
March 15, 2020 - 3 min read