US Central Bank cuts key interest rate by a surprising 0.5 percent points

Everything on the topic of Coronavirus read in the News-Ticker of FOCUS Online. The key interest rate was now up in the corridor of 1.00 to 1.25 percent, the

US Central Bank cuts key interest rate by a surprising 0.5 percent points

Everything on the topic of Coronavirus read in the News-Ticker of FOCUS Online.

The key interest rate was now up in the corridor of 1.00 to 1.25 percent, the Federal Reserve Bank (Fed) on Tuesday. The epidemic leave "risks for economic activity can arise", - stated in the message. The Central Bank will follow the "developments and their consequences for the economic Outlook, exactly".

market participants were least expected, the majority of a reduction in interest rates, such as data from the Chicago Mercantile exchange CME showed, however, at the time of the annual meeting at the end of April. In the past year, the Fed has lowered interest rates by a total of 0.75 percentage points. DAX 11.985,39 PTS. +127,52 (+1,08%) Xetra

  • 1 day
  • 6 months
To not apply the rate data

US Central Bank, the Fed, for the first Time to the emergency-lowering

However, the news Agency Bloomberg reported on Monday that Economists at the Bank of America and Goldman Sachs expect the emergency-lowering. In the process, Bloomberg noted that the Central Bank handle quite to this measure. Twice, the Central Bank lowered the interest rate unscheduled during the 2008 crisis and, before that, once in 2007 and three times in the year 2001. Before that, there were in 1998 and 1994, emergency interest rate cuts.

In the markets the Zinsenkung but did nothing. The US leading index Dow Jones-listed last with a minus 0.38 per cent moderate loss, while the S&P were 500, and the Nasdaq on the spot. However, the Dow Jones picked up on Monday with a jump of nearly 1,300 points, a portion of its losses of the previous week already.

The Dax jumped again, following the reduction in interest rates promptly, fell back last, but a daily high at 12.272 points. Nevertheless, the leading index of the German market, which was still at 2.04 percent in the Plus.

"does The Fed its usual role as the flagship in a convoy of global Central banks", commented the Commerzbank decision. "We will now wait and see whether today's reduction in interest rates, stabilized the markets actually. Since in the USA the infection with the Cornovirus increase, do not expect a swift end to the negative impact but to. If necessary, the Fed will add. The Fed is their use of ammunition', so that the remaining interest rate reduction, if necessary, aggressive. There is the view that restraint has little purpose, since early interventions promise greater success than it is to long to Wait I think."

President Trump's interest rate cut is not far enough

US President Donald Trump went on the interest rate cuts far enough. On the short-messaging platform Twitter, Trump wrote that interest rates still need to fall deeper - "in order to come into line with other countries and competitors". The US would not be on the "same playing field".

Trump is a longtime critic of the Bank, even before the term of office of the current Chairman, Jerome Powell, and calls regularly to lower interest rates. Only on Monday criticized Trump on Twitter, according to the "CNBC" that the Central Bank will "act as always, only slowly", while other countries measures against the economy of the Coronavirus would have to follow, to take the epidemic.

the policy help will

Only a few hours before the statement of the Fed had expressed the leading Western industrial countries (G7) to their will, against the economic consequences of the crisis to proceed. The spread of the novel Coronavirus and the impact on financial markets and the economy would be closely watched, it said in a statement, the Finance Ministers and Central Bank chiefs of the G7.

"in view of the possible impact of Covid-19 on global growth, we reaffirm our obligation to take all appropriate policy instruments to achieve strong and sustainable growth, and safeguard against downside risks", said The Minister of Finance were prepared, also fiscal measures - so, for example, higher government spending - to take, to the extent that this is necessary. To the group of the G7 countries, the USA, Japan, Germany, France, great Britain, Canada and Italy.

topic:

  • Virus epidemic puts a strain on economy - "a Tsunami of profit warnings": The coming months will follow for the companies bitter
  • Stimulus, the guardian of the currency, due to Virus economic expert warns Central banks: "Monetary policy is no panacea"

stock market expert: Now is the time for countercyclical Investing FOCUS Online stock market expert: Now is the time for countercyclical Investing

pnh/man/dpa
Date Of Update: 03 March 2020, 19:01

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