Tuesday, March 24, 2020 3:00:59 AM
European markets set to rebound amid positive global reaction to Fed stimulus
https://www.cnbc.com/2020/03/24/european-markets-react-to-fed-stimulus.html
Global stock markets are being boosted by the Fed’s pledge Monday that it will run an open-ended asset purchase program amid the global coronavirus outbreak.
The central bank said the program will run in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
The pledge is a new chapter in the Fed’s “money printing” as it commits to keep expanding its balance sheet as necessary, rather than a commitment to a set amount.
Shares in Asia jumped in Tuesday afternoon trade in reaction to the Fed, with shares in Japan and South Korea leading gains among the region’s major markets.
Federal Reserve Chairman Jerome Powell's whatever-it-takes moment arrived Monday.
The central bank signaled it would do practically anything -- extending loans to big and small businesses and purchasing unlimited amounts of government debt -- to help an American economy in a race against time.
After firing its arsenal at funding markets last week to prevent a public health crisis from morphing into a financial crisis, the Fed said it would throw another kitchen sink this week at credit markets that have broken down. The central bank unveiled a new generation of lending facilities to prevent a liquidity crunch from turning into a solvency crisis for American businesses.
"This is the first time they've really basically turned into a commercial bank instead of a central bank," said Michael Feroli, chief U.S. economist at JPMorgan.
The central bank's announcement came as lawmakers on Capitol Hill debated a plan to help reload the Fed's weaponry. The Trump administration and Senate Republicans proposed Sunday providing $425 billion to the U.S. Treasury that could be used to expand the kind of lending programs the Fed unveiled Monday. The bill hit a procedural roadblock after Democrats said it needed to do more to aid individuals facing unemployment or lack of income.
Monday's announcement was "really encouraging because the Fed didn't wait for Congress to pass this bill," said Tiffany Wilding, economist at Pacific Investment Management Co. "I don't think the markets could have waited."
The central bank punctuated its moves, announced 90 minutes before markets in the U.S. opened Monday, with an unusually explicit warning about the perils ahead.
"It has become clear that our economy will face severe disruptions," the Fed said in its statement Monday morning. "Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate."
https://ih.advfn.com/stock-market/stock-news/82063547/fed-unveils-major-expansion-of-market-intervention
https://www.cnbc.com/2020/03/24/european-markets-react-to-fed-stimulus.html
Global stock markets are being boosted by the Fed’s pledge Monday that it will run an open-ended asset purchase program amid the global coronavirus outbreak.
The central bank said the program will run in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
The pledge is a new chapter in the Fed’s “money printing” as it commits to keep expanding its balance sheet as necessary, rather than a commitment to a set amount.
Shares in Asia jumped in Tuesday afternoon trade in reaction to the Fed, with shares in Japan and South Korea leading gains among the region’s major markets.
Federal Reserve Chairman Jerome Powell's whatever-it-takes moment arrived Monday.
The central bank signaled it would do practically anything -- extending loans to big and small businesses and purchasing unlimited amounts of government debt -- to help an American economy in a race against time.
After firing its arsenal at funding markets last week to prevent a public health crisis from morphing into a financial crisis, the Fed said it would throw another kitchen sink this week at credit markets that have broken down. The central bank unveiled a new generation of lending facilities to prevent a liquidity crunch from turning into a solvency crisis for American businesses.
"This is the first time they've really basically turned into a commercial bank instead of a central bank," said Michael Feroli, chief U.S. economist at JPMorgan.
The central bank's announcement came as lawmakers on Capitol Hill debated a plan to help reload the Fed's weaponry. The Trump administration and Senate Republicans proposed Sunday providing $425 billion to the U.S. Treasury that could be used to expand the kind of lending programs the Fed unveiled Monday. The bill hit a procedural roadblock after Democrats said it needed to do more to aid individuals facing unemployment or lack of income.
Monday's announcement was "really encouraging because the Fed didn't wait for Congress to pass this bill," said Tiffany Wilding, economist at Pacific Investment Management Co. "I don't think the markets could have waited."
The central bank punctuated its moves, announced 90 minutes before markets in the U.S. opened Monday, with an unusually explicit warning about the perils ahead.
"It has become clear that our economy will face severe disruptions," the Fed said in its statement Monday morning. "Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate."
https://ih.advfn.com/stock-market/stock-news/82063547/fed-unveils-major-expansion-of-market-intervention
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