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That smells a lot like panic move and I am not sure it will move the needle much. Economy will severly shrink no matter what Fed do.
by ivankolev 7y ago
That smells a lot like panic move and I am not sure it will move the needle much. Economy will severly shrink no matter what Fed do.
- qayxc 7y agoIt's not a panic move at all. It's a required reassurance to investors and companies to prevent actual panic moves (i.e. complete market crash). I agree that the economy will shrink nonetheless, but there's a difference between a small recession and a full blown depression.
- A4ET8a8uTh0 7y agoI would normally agree with you, but whatever the intentions were, the market pointedly shrugged it off. I might even suggest that this FED move along with last week cut is part of the reason for the panic..
- infinite8s 7y agoThe financial economy is much much bigger than just the equities market.
- blisterpeanuts 7y agoThe goal is "to prevent ominous trading conditions from creating a sharper economic contraction", according to the article. Whether $1.5T is sufficient to accomplish this goal obviously remains to be seen. My guess (but don't bet your retirement portfolio on it) is that the economy will dip for 3-6 months, then as the virus exsanguinates, it will rebound. There's massive efforts in several countries to develop or adapt vaccines to covid-19: Israel, Maryland, and Texas companies all have candidates ready for human testing, or about to be ready. It's likely that in about six months there will be one or more vaccines well into human testing or perhaps even fast-tracked into the market, at least for vulnerable populations, and the panic will die down.