Federal Reserve slashes interest rates to zero

The Fed can, and will do much, much more. The signal here should be read as &quot;whatever it takes to avoid a depression.&quot;<p>Among other steps, this is likely to mean:<p>- Negative-yielding long-term treasuries<p>- Direct purchase of stocks or ETFs, which would require congressional approval. Expect the discussions to start soon.<p>The steps already taken and the ones to be taken will create financial manipulation on a scale never before seen.<p>If the Fed loses this fight, game over.

At this point, I&#x27;m actually starting to wonder. If we literally do nothing about the virus, or do the bare minimum, the worst case scenario based on the numbers I hear is 7.7b * 0.6 (total infections) * 0.02-0.03 (presumed mortality rate after the healthcare system collapses MINUS the rate if it doesn&#x27;t), ~115m people are going to die worldwide. This appears to me to be the absolute worst case scenario given current knowledge; gradually slowing infection rates, the fact that the developing world skews younger and is less connected, etc., may make it better. That 115m will skew heavily towards the elderly, i.e. loss in days-of-life would be significantly less than you would expect.<p>Now, if you put value on days of human life (which you totally can do; first, as a matter of policy, you won&#x27;t pay a million dollars to give a 90 year old another year of life, nor would you pay a billion to cure cancer in one teenager; second, you do it every day when you take quantifiable risks to make money or for convenience, everything from being a logger or a deep sea fisherman, to merely driving)... if you put value on human life, how much would this waste of life be worth? And how much waste of life is a worldwide recession or depression going to produce - in direct deaths, days lost by billions of people in s terrible economy, esp. if it gets to GD levels or worse, or in the developing world where it definitely will if the economy grinds to a halt; and on top of that in purely monetary terms, as people are not able to do things from buying houses to merely making ends meet, depending on the circumstances?<p>At this point everybody seems to admit it&#x27;s beyond containment and the only thing we are trying to do is flatten the curve and prevent the deaths. Is entering a recession, or worse a depression and risking a total collapse really worth it? I am starting to doubt it.<p>PS. Frankly this reminds me of plane crash reporting. Everybody is, comparatively speaking, overreacting because the event is visible and distinct, even though many more people die in cars every day.

Not only that but they&#x27;ve removed the reserve requirements entirely for &quot;thousands&quot; of banks. There are only ~4500 commercial banks in the USA total. So that&#x27;s at least a good fraction of them. These banks can now create money out of nothing as much as they want.

My &quot;high interest&quot; savings accounts already took a recent haircut and this will accelerate that. I understand that&#x27;s the idea: make investing attractive and savings unattractive. But for a regular joe like me, this is exactly the time I want to be saving more so it stings.

SARS-CoV-2 doesn&#x27;t care about monetary policy. Why not give money directly to the people who need it? They&#x27;ll spend the money right away.<p>I&#x27;m willing to sacrifice my 401(k) and retire on just SS if need be if my government is willing to help everyone worse off than me.

IMHO this is a really bad idea. Let&#x27;s hope they raise them slowly this time, unlike 2007-8 when they went back up quickly and triggered mayhem.

Stopping production for a significant period of time was the first gut punch covid is throwing. The second one seems to be landing on Europe and third will be North America.<p>This means China will have a head start on getting supply up and running.<p>If the ROW is at a standstill in production, China will fill that gap which could further displace a lot of production in the west.<p>China getting containment in order didn’t bounce back but also bounce ahead in many places.

Dumb question: does this mean normal citizens can take out loans at near-0% interest, or something close to that? I know credit card interest rates are typically tied to “the fed rate” but a but higher?

I think the issue is cash-flow. So the govt should do things to mitigate cash-flow. Such as pause rent&#x2F;mortgage payments for 2 months for anyone that is out of work due to this.

This feels like the end of an era - an era that ran from the fall of the Berlin Wall up to the appearance of Covid-19. A global era, a largely peaceful era, a profligate era, and an era of growing inequality. Who knows what comes next...

Does this interest rate transfer to lower mortgage rates? Is now a good time to refinance loans?

In the context of Covid, wouldn&#x27;t lowering economic activity help keep people home?<p>It seems more than &quot;just&quot; saving lives. Purely economically, wouldn&#x27;t a crashed health care system hurt the economy for a longer term?

This is not going to help<p>- It takes two years for monetary supply changes to fully propagate through the economy<p>- Cutting rates to 0% has not been effective in Japan or Europe<p>The fed does have a role to play here<p>- They can provide liquidity to the market<p>- They can serve as a backstop in a time of crisis<p>DC needs to get their shit together<p>- Eliminating Trump&#x27;s tariffs would do more to increase long-term investment than cutting rates to 0%<p>- They should have created targeted lending program to help businesses that need short-term cash flow assistance yesterday; the next best time to do it is right f<i></i>*ing now

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Imagine if Trump had tried as hard to contain coronavirus as he’s trying to pump markets rn

Why is this warranted yet? This is a terrible that will only signal that the fed is panicking and nothing else. There are no indications that the supply chain is disrupted or that the economy is sputtering. It will happen at some point in the next few weeks with or without the infusion and rate cuts now. These things are much better done when warranted rather than now. As of now it’s only a humanitarian crisis and only thing that will help is effective communication to contain the pandemic. These infusions now will soon be forgotten by the next bad news and the effect will not persist.

We need fiscal stimulus, and we need it yesterday. Time to put money in people’s pockets.

Bank runs are coming. We are witnessing financial collapse and possibly the early failure of the American empire. Futures trading was halted today. Market will tank tomorrow. That&#x27;s after a $1.5T stimulus. This is it.