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Fed cuts rates by half a percentage point to combat coronavirus slowdown

Chomsky said:
Source: (CNBC) Fed cuts rates by half a percentage point to combat coronavirus slowdown

What is not easily conveyed by this breaking news article, is that at this morning's G7 meeting no concrete course of action was agreed upon, thereby giving the appearance the meeting was a substantive failure. In response it would seem, the Fed moved unilaterally and unexpectedly immediately after.

If anything, it looks like Fed is taking the economic effect of COVID-19 quite seriously. The markets had an immediate slight positive blip, but now minutes later they are moderately back in the red. I suspect the markets are sill trying to digest the news.

I haven't seen the Fed statement yet, but the Fed Chair has a press conference scheduled for 11:00A. Apparently the statement declares the coronavirus economic risks are, "greater than expected".
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The Fed uses rate cuts to promote growth. What possible growth will result from a rate cut that says it addresses the seriousness of the covid-19 virus? This rate cut means that when the recession comes, the Fed will have 1/2 a point less to actually deal with growth problems.
 
Mycroft said:
While we have a good economy, we don't need to fear recession. The Fed should be working to keep our economy good.
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A recession is always coming. It is not the Fed's job to keep the economy good, it is their job to control inflation and manage unemployment which can help to drive a good economy.
 
Mycroft said:
Yes...now. It hasn't been that way for the past 30 years. It changed when Trump became President.

And it could be much better if the Fed was more concerned about Main Street...that is, American people and American business...instead of making this token response for Wall Street...that is, gamblers.

I snipped your rant about the American people and Sanders. That's irrelevant to anything I'm talking about.
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If you could point out one economic trend line that changed when djt became president I'd be interested in seeing it. I'll wait.
 
Lovebug said:
So it isn't just because Trump is thinking about November, but more related to a global economy and pandemic.
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I believe it's both. Trump supports a booming market as do investors and other countries.
 
upsideguy said:
Ah, no. The unemployment rate, which was very high after the deep recession of 2007, has been dropping steadily ever since 2009.

Trump, inherited a full employment economy (4.3%), and has appreciated the steady decline to 3.3% since taking office. He is has done little to improve the unemployment situation nor done anything to reverse the trend. He has presided over an economy that has seen unemployment fall from 4.3% to 3.3% .... that would be 1% in a full employment economy. Now one could argue that isn't really a big deal, even though Trump is quick to argue it is a big deal and he deserves all of the credit.

Yes, unemployment is as very low (maybe even too low), but I am not certain what 30 years has to do with anything as the currently unemployment rate was matched in April 2000, 20 years ago during the Clinton Administration.

Study up pal, as it is clear that you know not of which you speak.

Unemployment Rate: 20 years and over (LNS14000024) | FRED | St. Louis Fed
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LOL!!

Trump inherited "full employment"...of part time employees. He turned that into full employment of full time employees and wage increases.
 
mrjurrs said:
A recession is always coming. It is not the Fed's job to keep the economy good, it is their job to control inflation and manage unemployment which can help to drive a good economy.
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Oh? Then why are they manipulating rates for Wall Street?

If they want to control inflation and manage unemployment, they should work to help Main Street.
 
Mycroft said:
LOL!!

Trump inherited "full employment"...of part time employees. He turned that into full employment of full time employees and wage increases.
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Make a bold statement .... then back it up. What is your cite (from a credible source) for this.... let's see it. Again, if you make a claim and can not defend, its considered to be "not true".

Here are my cites that say you are all wet... Again, no change in trend lines from the change in POTUS'

PolitiFact | Donald Trump wrongly claims there are many more part-time jobs because of health care law
https://www.advisorperspectives.com/dshort/updates/2020/02/10/the-ratio-of-part-time-employed-january-2020
[url]https://www.nytimes.com/2020/01/10/business/economy/december-jobs-report.html
[/URL]
How real is Trump's jobs 'miracle'? - BBC News
Trump Has Created 1.5 Million Fewer Jobs Than Obama
How good were the 10.9 million jobs under Obama?
https://www.theatlantic.com/busines...-obamas-part-time-america-in-5-graphs/283674/
 
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grip said:
Yes, it reminds me of that movie 'The Big Short' about how a few brokerage firms and hedge funds shorted the housing bubble before it pooped.
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That movie was such a great display of what happened and how disgusting people can be in that industry.
 
mrjurrs said:
If you could point out one economic trend line that changed when djt became president I'd be interested in seeing it. I'll wait.
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I've asked countless times.

No one has ever shown a "trump bump" in any graph trend line.
 
Chomsky said:
But why, in a good economy? We need those rate cuts in our quiver for when we do eventually go into a recession.
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I think he is factoring in a recession, with GDP growth already forecast at below 2% a shock like this is likely to cause a recession no matter what the Fed does.
 
Mycroft said:
Oh? Then why are they manipulating rates for Wall Street?

If they want to control inflation and manage unemployment, they should work to help Main Street.
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I agree that the Fed is doing the wrong thing now (say thanks to dear leader for that). Working to control inflation and manage unemployment does support Main Street.
 
Gimmesometruth said:
That an indicator you cited is in decline
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That is irrelevant and that indicator could continue to rise if the Fed...and others who oppose Trump...would, instead, work with him.
 
mrjurrs said:
You're too funny. This is White House issued, and look at the dates they are comparing. Are the the same? No they vary from chart to chart. Only the White House would include consumer sentiment in an economic numbers report.
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You should probably look at those charts again. You are missing their point.

And consumer sentiment is a very important economic indicator. Without it, there will be no demand.
 
mrjurrs said:
I agree that the Fed is doing the wrong thing now (say thanks to dear leader for that). Working to control inflation and manage unemployment does support Main Street.
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Don't blame the Fed's actions on Trump. He didn't ask them to manipulate rates for the benefit of Wall Street.

In any event, the Fed has done nothing to support Main Street since Trump has been President. They continue to work for Wall Street.
 
Mycroft said:
LOL!!

Trump inherited "full employment"...of part time employees. He turned that into full employment of full time employees and wage increases.
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Where's your proof for that claim? A Bankrate survey published in July 2019 shows that wage growth has been rather stagnant. 54% of the respondents said that their wages and salaries haven't recovered to their pre-recession levels. In other words they're making less money now then they were before the great recession.
 
Chomsky said:
Yeah - but if we don't act now, we will be in next recession!
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If the corona virus really takes hold here in the US and spreads broadly there isn't anything the FED will be able to do to effectively mitigate the economic impact of such an event really. They could cut the rate to zero and it won't matter. This economy is driven by consumer spending. If those consumers become very concerned about their risk of contracting the virus they aren't going to go to places where that risk of contraction increases in their perception. They won't be going to theaters, restaurants, sporting and cultural events, malls, supermarkets, etc. Businesses and work places may close temporarily, employees told to stay home, incomes and supply chains becoming disrupted, travel curtailed, schools closed and children sent home, their parents either having to find caretakers for them or stay home with them. Just have to hope that it doesn't get to that point.
 
It does seem odd to "combat a slowdown" on the day after the Dow makes it's biggest point gain in history.

"Investors are feeling more confident than we expected as of last week ... so let's shake them up ... what could go wrong?"
 
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