After last week’s carnage in the markets Wall Street was chomping at the bit for the Fed to intervene. And as of yesterday, they did. On Sunday, the Fed announced a slew of emergency measures in hopes that it would “stop the bleeding” caused by Coronavirus fears.
- Slashed Rates to 0%
- Launched QE5 ($500 billion in Treasury purchases and $200 billion in Mortgage Backed Securities)
- Boosted Intraday Liquidity
- Eliminated Reserve Requirements
- Coordinated Swap Lines (with the Central Banks of Canada, England, Japan, Europe and the Swiss National Bank)
But will these emergency measures be enough to ease investor’s fears? It doesn’t seem so. Just today the DJIA closed down an astonishing 2,997 points or 12.93%.
But what’s even more concerning is the Fed is out of ammunition. Rates are already at zero. How long before they’re negative?
The only other “tool” the Fed has is more QE, which we all know is nothing short of printing un-Godly sums of money.
Lord help us.