The Fed Deployed Its 2008 Arsenal All in One Weekend

Steps the central bank has taken to keep credit flowing in a crisis are familiar, but the incredible speed is new.

Comments: 201

  1. Mr. Trump may be “very happy” with the reduction of the interest rate and Mr. Powell may think that he has “plenty of policy space left” by buying back government debt and engaging in quantitative easing, I, as a monetary sustainability sociologist, think that “dusting off” the 2008 playbook is not sufficient. We need to transition from quantitative to qualittive easing or from a debt-based financial system to a credit-based one. This monetary/financial transformation is predicated on Abraham Lincoln’s valuation of money being a servant rather than master of human societies. Thus, in a credit-based financial system the public authorities engage in qualitative easing and make interest free loans and other UBI (universal basic income) to directly assist citizens and businesses without the intermediation of privately owned banking systems. The latter have to transition into becoming utilities without the privilege of creating money. Money creation is the sole right and duty of the public sector. While the idea of a credit-based financial system has been around since Colonial days and during the 1930s depression, my proposal at to have international monetary system based on the monetary carbon standard of a specific tonnage of CO2e per person has been around for about a decade. It makes the most basic economic system respond to the looming climate catastrophe the duration of which will last long after the Corvid-19 disaster has gone.

  2. @Frans Verhagen You write: "Money creation is the sole right and duty of the public sector." The Federal Reserve System creates money yet it is, arguably, not in the public sector. Its Governors and Chair are appointed by Presidents for fixed terms but it is funded by contributions from banks. Its employees do not participate in federal government employee programs (pensions and health insurance).

  3. I don't think there is too much dust on that playbook. Fed has been dumping cash into the banks during the past year or two already, just not quite as much as now.

  4. Bottom line in my opinion the Fed can only soften the blow in a major economic downturn. In this case, with a rare major medical scare, the effect of the role of the Fed is even more hard to predict.

  5. Interest rates are intended to price uncertainty about a borrowers ability to pay back a loan. There is a lot of uncertainty right now. By artificially keeping interests rates lose, the fed encourages to make unsustainable investments. Which will just lead to more instability and deeper market corrections in the future.

  6. Interest rates are intended to price uncertainty about a borrowers ability to pay back a loan. There is a lot of uncertainty right now. By artificially keeping interests rates low, the fed encourages investors to make unsustainable investments. Which will just lead to more instability and deeper market corrections in the future.

  7. Actually, what this all reminds me of isn't 2008, it reminds me of 1968, where I and hundreds of thousands of Americans like me were immersed in the Vietnam War. No one was in charge, it was obviously a disaster, but one found oneself caught up in the nightmare, alone and without a way to yell..."maybe we should just go home". We were trained to trust our leaders, but as time proved, that trust was a deadly mistake. Now there are no strong financial protections against the coming recession, and as others have mentioned, few social programs to help the destitute survive. I am cynic enough to sense that what remedies there are left will help the super rich, at the expense of the poor and the powerless. Hugh

  8. Bleak but accurate and quite poignant. Thanks, Hugh Massengill

  9. @Hugh Massengill The commenters from Oregon are always on the money. Give the man a Voodoo Doughnut and a cup of Stumptown coffee.

  10. The American people will soon realize the Fed can no longer provide any stimulus that will have any material effect on the current crisis - it’s influence has been severely diminished. Lowering rates - providing liquidity- all for naught - with little to no effect. It’s over - there is no secret sauce or magic potion out of this one. In fact low rates, which are headed to negative territory, will result in another Great Depression. We’ve borrowed and borrowed and borrowed ourselves into oblivion- and now we’re going to be borrowing a lot more. It’s over - the stock market, whose run was due to low rates, will be plunging to lows that will be lower than anyone expects. Get ready.

  11. Last week Trump pressured Powell to lower interest rates which sent the market crashing lower. The .50 rate reduction caused a huge selloff so what did Trump's fed do this week? Another, even larger rate cut which lead to another massive selloff. I watched the S&P go "limit down" on Sunday halting the slide. You might have thought they'd learn from the .50 rate reduction that you cannot control the fear emanating from corona thru rate cuts, but no such luck. Trump makes the same mistake twice. And brags about it.

  12. @Bond Trader You're right about everythig you said except the ending. Trump never makes mistakes. And he brags about that. He wasn't wrong about his inaugration crowd sizes. He wasn't wrong about the Central Park Five. He wasn't wrong about Kim Jong Un, or Putin, or Erdogan, or MBS. So of course anything he says will calm intelligent investors. /sarcasm.

  13. @Bond Trader :: I had exactly the same thoughts, the same reaction. These guys don't learn! Apparently they can't learn. They think that if they make the same mistake twice as big, it won't have twice as bad an impact. But of course, why should anyone think Trump [or anyone in his Cabinet, family, administration and so forth] would ever learn? Their only purpose is to please Trump. Everyone, every citizen, every investor knows this. That is why everyone panics. Everything we are seeing is a crisis of trust.

  14. The bank of last resort, which is going to do whatever it takes keep dollars flowing in the former United States (and the dollar-denominated "world"). The Fed now offers essentially free "money" to banks, so that the banks can in turn lend it out (at a profit). That's how "money" is created in this system. Consider: the Fed can create this "money", with a printing press in the good old days, now with a keystroke and a wink. It is "fiat" money, that is, something willed into being and completely dependent on the perception that it will be accepted in trade. It is credit, the word based on the Latin "credo" which means "I believe". It is based on belief - faith - that a Federal Reserve Note is really worth something. When that faith is gone - and manifestly it is going - the system collapses. People demand something real and usually tangible, to be used in transactions. Historically, that has been precious metals. In WW II, cigarets and chocolate. The Fed and the international banks which own it will ensure that the banks to which is giving all this free "money" do not use it to corner the market on food. I'd expect that the banks all become state-directed now. A command economy - like the Soviet Union.

  15. This seems more a political move, triggered by Trump's hysteria in moving the markets for his own electoral benefit...than a shrewd financial move to save us from a recession. Could Mr. Powell be enticed to do this to minimize the chance of being fired by an unhinged president, convinced he is above the law, able and willing to break the healthy separation of governmental powers? This, without aggressive measures to contain the coronavirus crisis, may backfire.

  16. what about relief for the 70% of GDP - consumer spending? Credit Card companies need to sharply cut their interest rate for 6 months for all their customers, a move that their shareholders should recognize to be in their best long term interests as well. Commercial loans and mortgages need to be reviewed and also adjusted so that the system can get through a severe slowdown. Where are you Paul Krugman when we need you?

  17. What planet is the Fed working from? A change in borrowing rates for banks is not going to magically cure a part-time employee of a cleaning service of any illness. A financial stimulus is not going to pay an employee when their restaurant shuts down. There is no Fed action on this planet that will restore trust in a Federal government that has lied about this disease and its effects because "the numbers looked good" at the time. I'm glad that the Fed members have some way to occupy themselves while they collect *their* paychecks and visit *their* doctors via their high-speed broadband network, but they may as well sing happy songs to us as well. In the absence of power, humans do strange things.

  18. @CGatesMD Its not the Feds fault. They are doing their best using monetary policy. This crisis calls for fiscal policy and the only type of fiscal stimulus the GOP can stomach is trickle down. Anything else, like paid sick leave, emergency aid to the newly unemployed, small business support is seen as a threat to established interests. Socialism. Most people don't know the difference between fiscal policy and monetary policy.

  19. The only equivalence I see between 2008 and today is Nancy Pelosi was Speaker of the House and she took the crisis seriously. I'll wait to see whether she applauds this move. Trump -- all he cares about is Trump Organization debt.

  20. When offered a choice between a candidate who wants guard rails, a driver who has historically driven the car off of the bridge or a candidate actively driving the car off of the bridge, Americans choose the guy who drove us off of a bridge. The next President is going to redesign the economy and if it’s not Sanders, millennials should strike.

  21. @Michael Brown If it's not Sanders, *every Dem* should pressure Biden and Congress to move to the left, even just a bit would be a progressive move, considering that most Dems are Eisenhower Republicans.

  22. @Michael Brown It's not just Millennials who should strike. We are essentially on strike now. The rich who got richer under Trump had better pony up or else. At least 15 Trillion in wealth needs to transfer back to the people who actually do the work in this country.

  23. Now the Federal Reserve can look back at the unnecessary rate cuts done last year apparently for political purposes and have buyers remorse. Another Republican president, another recession.

  24. I've said it before and I'll say it again: In this case, interest rates are NOT the problem. Transparency and availability of COVID 19 testing is the problem. Both of which the federal government, under this abhorrent leadership, is failing at. Until healthcare is addressed, Powell is bending to Trump's pressure and wasting what little ammunition he has left to spur the economy - once this health crisis subsides. Hopefully within months... I'm not a huge Cuomo fan, but after seeing him on the news the past couple days, taking decisive and tough action in NY, there is stark different in his leadership to that of Donny.

  25. @Collin Andrew Cuomo, Gavin Newsome, Jay Inslee and others, have all displayed leadership--because we desperately need it and it's not coming from Washington.

  26. @Collin Decisive action? You mean the Mayor and the Governor were in concert with closing schools and restaurants in NYC this past week?

  27. This is a really big deal. Bond action has been decoupling from stocks. US treasury bonds are the gold standard of the credit markets. This indicates extreme stress in the flow of credit. These money flows, largely unseen by the public are the lifeblood of finance. If those markets seize up, everything seizes up. Treasury bonds are considered a flight to safety. If appears that safety now means hoarding dollars. That's when things start to fall apart. Lines of credit then disappear. The FED is trying to keep these line of credit free flowing with massive, essentially overnight, quantitative easing. The FED is backing up the banks. What does this tell us? It tells us that the financial markets are losing faith in the US government. That faith is why US treasuries are considered the gold standard of credit, no risk in getting your money back. The markets are telling us there is significant risk. Gosh! How did that happen? Do you thing that maybe after three years of incompetence, and never ending alternative facts (lies) that the veneer of Trump's greatness has worn off? It appears that it has. People vote with their ballots, their feet (where they go) and their dollars. This new financial crisis is an election of dollars and Trump is losing it. As before, the FED, hated by arch conservatives, is saving us from the arch conservatives... again.

  28. @Bruce Rozenblit And the next president, a Dem, will once again have to clean up the mess. But it feels like two steps back, one step forward.

  29. @Bruce Rozenblit Your comment is silly. The same thing is happening in Europe. Have they lost faith in Mr. Macron or Dr. Merkel also? Not everything is Trump's fault when the US and Europe are working through a pandemic of unknown duration and scope.

  30. @Bruce Rozenblit Faith in the US government today means faith in DT because all the people around him are sycophants who cannot tell the emperor that he has no clothes. He has walked away defaulting on his debts and will do the same again with no compunction.

  31. This is the wrong remedy to a problem wrongly diagnosed. Trump wanted low rates - he pressured the Fed Chair and now he has them. the gasps of a dying man. Will the consumer spend more? - on what? - there is nothing people want to buy left in the shops. No hand sanitizer, no wipes, no toilet paper etc etc. Frozen stuff , rice pasta, jars and cans are flying off the shelves Nobody is going shopping and amazon are running pout of stuff to deliver. All the inventories in China have run out - and it will be a while before we get more in the ports. Ga is dropped in value - its as cheap as chips and nobody is going out driving. We need to get people back to work. That is the cure.

  32. @mrc It's actually a good time for a road trip, go out and see the countryside, go for a walk, clean out that closet you never had time for. Bet the birth rate will have a blip up 9 months from now.

  33. @mrc "Will the consumer spend more? - on what? - there is nothing people want to buy left in the shops." Right. I'm not interested in a new handbag right now. And pretty soon there won't be any shops open anyway. First we need to see that fewer people get infected by staying home. Then we hope we can get people back to work. Stay safe. Shelter in place.

  34. The situation is bad but not disastrous. It is our response that is making it a disaster. Do you want to invest in your people or your banks? Moderates and Republicans say that they’re not socialists and yet they pump money into their balloon of an economy every ten years. I hope that millennials choose a progressive program, if we make it to the other side.

  35. The last time the Fed and the White House deployed their economic disaster playbooks, they ignored homeowners. Millions of people lost their homes because they lost their jobs and couldn't pay their mortgages. And large investors like Steve Mnuchin picked up foreclosed homes for a pittance. Why oh why don't these new monetary and fiscal actions require banks and businesses to restructure and lower rates on mortgage and other consumer loans to ease the pain for households?

  36. @Bruce Kahn Because that would require looking beyond the end of the quarter. It would also require creative thinking

  37. @Bruce Kahn Residential rent and renters. Always left out.

  38. @Bruce Kahn Why can't you refinance your mortgage? Most HELOCs and consumer debt is floating rate and will adjust automatically. If you can't pay your mortgage because you are unemployed, lowering the rate will be irrelevant. Luckily we are at record low unemployment right now which should help this problem.

  39. This is just another big bank bailout. If one were to look at how the Federal Reserve used to operate after Glass Stegall(GS) open market operations would flow to banks and ideally hit the common man or small business owner through loans or loan extensions. Not so since Phil Graham, Bobby Ruben and Sandy Weill engineered getting rid of GS banks are nothing more than bucket shops, trading stops and hedge funds. This move will do nothing to help the little guy. But boy will it help the rodents at the corner of Broad and Wall.

  40. @Paul The banks are not being bailed out as this is not a banking crisis. If anything they are hurt when rates are zero or negative, look at the European banks as an example. The banks have been stress tested and are sound. What the Fed is trying to do is provide liquidity to companies who are solvent, but are having trouble with access to capital. Why would you want companies like Ametican, United, and Delta not to be able to get credit when they can post collateral? The Fed will soon be in the market buying commerical paper. That will be one of it's most effective operations.

  41. Ha! I've got a $100 bet riding on the Fed going negative in the next 24-months. Let's all wrap our minds around what negative interest rates means. -C

  42. @Charlie Negative interest rates would mean that you have to pay the bank to hold your money.

  43. @Charlie If it means the same as negative space, it's a deep, dark hole that consists of absolutely nothing.

  44. Would the FED not have more wiggle room had our incapable leader not bullied them into lowering rates prior to this pandemic instead of keep the market artificially high so he could look good? We should have saved the prior cuts for when we truly needed them. Seems we now have a reason to cut rates and now the FED is out of plays after placating the bully in chief. This is yet another example of positions that should be immune from political overreach. The FED and other departments should be filled by lottery, all the names of qualified candidates goes in a hopper and a name is drawn ever so many years. Some things are more important than politics and should be immune from a horrid administration.

  45. The Fed is prescribing solutions that are only doomed to fail long term and require an escalating sequence of remediative steps which is ultimately going to have the entire $ based system liquidate. Let's hope the chinese hold the debt till then and have some comeuppance .

  46. Trump came on the stage huffing and puffing, obviously short of breath to the point where I thought he was having a heart attack. And for what? To announce his glee that the interest rate was now zero. The average person couldn't care less about the interest rate reduction. The average person cares about the effect of corona virus on him/her and their families. They care about keeping their jobs and the ability to find food and fill their prescriptions. Exactly what planet does Trump live on that he doesn't know this? Trump ran off the stage as soon as he announced his glee and without taking a single question.

  47. @george: Except that the real “average person” has savings which have been negatively impacted for over a decade by the Fed’s continual prostration at the feet of Wall Street interests (no pun intended).

  48. as always it's all about him. he's a forever debtor. so he wants zero or negative interest rates. he's been running for reelection from day one, so he wants the stock market to look good so the great business man in him looks good. smoke and mirrors. it's not about you and me

  49. @george His own net worth is tied to real estate, which is probably the most leveraged industry. That's why whenever there is an excuse, he goads the Fed to lower interest rates and BINGO, he hits a jackpot. If you do not understand, just think about your own mortgage and how 1.0% decrease could dramatically affect your monthly payments and the total payment.

  50. Will the Fed learn any lessons? Their unnecessary and mostly political rate cuts of last year have come home to roost, leaving them little ammunition to deal with a real emergency. History repeats itself, another Republican president, another recession.

  51. @tom Rate cuts were employed by both Democratic and Republican administrations in response to the Great Recession of 2008 and savers have paid the price since then in the form of lower interest rate.. The recession we are facing now would be a recession we faced no matter who was in the White House. Viruses are non-political actors.

  52. @Quiet Waiting Maybe Tom is suggesting that after we obviously got past the great recessions worst parts, we could have eased off the pedal. By continuing to add gas when we are on loose gravel only makes noise and looks cool to the simple types, but results in only increasing the chance of sliding off the road into a deeper ditch.

  53. @Arthur Prior to the virus, the US had the highest interest rates in the developed economy, record low unemployment, a sound banking system, and was starting to see growth in wages for the lower end. Not sure why you would want to have 'taken you foot off the pedal' with any economy like that.

  54. What about the role of investor confidence? Seeing a Donald Trump coronavirus press conference is frightening. Imagine that you had just boarded an airline flight, sat down in your seat, and then heard an announcement from Donald Trump that he would be flying the aircraft due to his knowlege of airplanes and natural ability. I and many would get off as soon as possible. The president is utterly reckless and shows no leadership. Great leaders don't blame others or make excuses.

  55. @Paul Great comparison. Needed a good laugh. Saving this one to my 'favorites'. Thanks.

  56. @Paul Don't you love when he said, his press conferences are so good for the economy so maybe he should have one every day? Jeez. Talk about a lack of self-awareness.

  57. @Paul , yep, and now he’s pushed the fed into firing all their guns at once, leaving no ammo for the actual battles ahead. Another fiasco at the hands of an unstable non-genius and his hapless gang.

  58. Yesterday my brother and I played golf, and then ate at a local restaurant in Spartanburg, SC. The place was almost empty. Zero percent interest rates aren't going to put butts in the restaurant seats, nor put tips in the wait staff's pockets. And the $700 billion ($2,000 for every man, woman, and child in the USA) injected into the bond markets isn't going to fill hotel rooms with travelers on their way to Disney World this week.

  59. @Kevin Brock It wont do any of that, but buy time for companies who need liquidity to have access to it. You dont want all your airlines to lay off everyone for a two month event because banks wont lend. The low rates will also help with the recovery for companies to refinance their debt at lower rates. The challenge is waiting for the virus to pass. By flattening the curve you also extend the duration your economy is unable to properly function.

  60. @brian gasser You're correct as far as that goes. Save the corporations. But, what about the loss of wages, the inability to pay rent, mortgages? What about the real small businesses? The diner, the local bar. Theses places run on a thin margin. The Fed and WH are using the same old playbook. What's needed now is creative thinking. That's a difficult thing for people who have been in politics all there life.

  61. @brian gasser Airlines will lay people off if they don't have customers, no matter how much access they have to liquidity. I'm getting a bit tired of the canard that corporations will hire more people if they have more money. Corporations don't exist to hire people; they exist to meet demand. They will only hire the people they need to meet demand.

  62. The car has faulty electrical wiring and Mr. Powell is pouring gas in a tank that was full of fumes.

  63. The GOP and their Trump are one scary outfit.

  64. Yes that is correct

  65. Feds gotta help the rich stay rich.

  66. Actually. It's the 2001 playbook.

  67. Why hasn’t the stock market been closed as it has been in previous crises ??

  68. @robert rostand, m.d. You want markets open to continually find the clearing price for assets. What good would shutting markets down and not knowing the value of equities and bonds. The goal is to have a market be able to operate with buyers matched with sellers.

  69. @robert rostand, m.d. Trading is electronic and automatic and could go way too far before anyone has time to think. It gives time for some rationality, like closing a bank when there is a run on it.

  70. Currency manipulation by any other name...

  71. Yep. And did you catch Trump's little parting reference to one of his campaign musings: re-negotiating the debt. How many ways can we spell bankruptcy?

  72. “We think we have plenty of policy space left, plenty of power left in our tools,” Mr. Powell said… "Stop, or I'll shoot!", said the man with the empty gun.

  73. Apparently the markets think the Fed is hiding something by doing a rate reduction and are tanking this morning. So much for winning.

  74. @Edward Stern I think maybe Trump meant to say "whining," like after a while with him you'll be so tired whining . . . After all, that's exactly what's gone on since January 2017.

  75. Wrong policy by several miles. We have to take care of the affected. Who became unemployed or underemployed. Who does not have health insurance or sick leave. Who will pay for testing. Where are the testing kits. Are local machines being retooled for supplies needed in hospitals and at homes. Are our electricity and water infrastructure unaffected. Where is the national guard (military) when we need them. Where is the bipartisan crowd?

  76. Idea To Minimize the Economic Impact of Coronavirus: Suspend all rent, loan & mortgage payments, between all parties, for a period of 30 days, w/out any penalties or interest

  77. Suspend ALL rent and mortgages is a very broad approach. Anyone who is able to pay rent or mortgage should do so. Landlords and banks should work with tenants and mortgagees who CAN'T pay to minimize the overall impact. You can't get blood out of a turnip.

  78. An appropriate next step would be for the government to issue a mandate that because they are requiring businesses to close or dramatically shrink, commercial property owners with mortgages will not be in danger of their properties being foreclosed or sent to special servicing because of an inability - caused by commercial tenants slowing or ceasing rent payments - to service their mortgages. Otherwise every office building, hotel, shopping center, amusement park, etc., will go into default and destroy the economy.

  79. @Joseph Alda You're absolutely right, but that would require creative thinking by people, such as yourself, who have experience in the *real* world. Decision makers at the level of the White House and the Fed live in a very different world. Tax cuts, interest rate reductions, withholding cuts, this is all they seem to know.

  80. The reason the markets still fell, despite massive Fed intervention, is simple. The fed is not going to stop this virus. Only a massive public health initiative, including greatly increased testing, monitoring, quarantine, and treatment, as well as policy initiatives like banning large gatherings and travel restrictions and strict monitoring, can eventually slow this down to a trickle. We are finally on the right step, but have a long way to go before there is any confidence that things will return to normal.

  81. They’ll eventually resort to Keynesianism, but only after every monetary policy fails.

  82. @EW so there is still room to borrow and spend on things like infrastructure and not just bailouts to the banks and oil companies? I have concerns about bailing out shale bonds. Those folks should lose every penny.

  83. @EW You mean, like, the monetary policy whose main justification was, that it would save the Free Market from Socialism? Could be a bit late for that...

  84. The potential for social upheaval is much great than in 2008. Back then, some had faith that our government would do more than bail out the banks and corporations. It didn't. I don't think we'll stand for that this time.

  85. @cece lol, you think Americans will react?

  86. The only thing that *should* calm the markets is some kind of assurance that consumers are going to be protected. Individual people are responsible for the consumer spending that accounts for 70% of US GDP. So far, each massive intervention has only buoyed markets for less than an hour. All they're doing is illustrating the degree to which they're powerless. Ironically, the Administration's utter lack of empathy *is*the*problem* that's tanking the market. I've lost thousands, but schadenfreude makes up for some of my losses.

  87. @Mark Gardiner I would argue the consumers are responsible for 100% of GDP. There are two kinds of demand--direct and derived. Direct demand is people buying things to use. Derived demand is people and companies buying things to make, ship, and deliver those things that people use. Without ultimate consumers there's no demand for any of that stuff.

  88. @Mark Gardiner I totally agree. The markets started recovering with Nancy Pelosi's fiscal package that would help ordinary people, then it became apparent that it had been gutted by the GOP. Now Trump is demonstrating his bullying, ignorant behavior and it's scary.

  89. @Mark Gardiner Mr, Gardiner, you haven't lost a cent until you sell your stocks. If you haven't done so yet, you have paper losses, not real ones. I held my stocks through 1987 and 2008 and I am holding now. This too shall pass.

  90. Mr. Powell has a big advantage over the former chair Ben Bernanke from a dozen years ago: He and his colleagues have had all these years to study, assess and build upon the tools that the Bernanke Fed invented and deployed to combat that crisis. We must realize and appreciate the contribution that the Obama administration made, without we would find ourselves in a big sinkhole.

  91. Given that several hundred million of us will not be conducting optional commercial transactions; given that major industries such as aviation, hospitality, and public entertainment are enduring a significant drop in income; and given that global supply chains are being stretched to the breaking point, we are heading into a recession. The Federal Reserve Board, like The Great Oz, may push all of the buttons on the panel, but the economy will remain on an off ramp.

  92. The reasons the markets sank is because the Fed has not done enough yet. The scale of the economic damage could be that of the 1930s, making 2008 look like a party. Until the Fed understands the magnitude of the problem and acts accordingly, the country will continue to implode and all its businesses will shutter.

  93. There is an adjustment period for people to learn to live with Coronavirus. During this period, the markets will experience wild swings and Fed simply trying to make a smooth to new reality. The economy will take a year to recover, assuming a vaccine for Corona virus could be developed and tested. Unchecked spread of virus will destroy the world we know. At that point, who cares about the stock market?

  94. @Kodali No reason for it to destroy the world as we know it. If we can check its spread and make it go slower it probably won't pick up virulence. It is a short term danger to a minority of the population. That said, I'm in that minority.

  95. The action actually fed the crisis. The selloff will continue, then eventually everyone will rush in to benefit from the rise back to normal prices. The stock market is not the problem.

  96. Had Powell knuckled under to Trump's bullying he wouldn't have had room to move anything...not that it seems to have mattered, as of yet anyway. The market will return to pre-Trump election levels and their message will have been delivered with multiple exclamation points.

  97. @Mary Elizabeth Lease If we are lucky, the market will return to pre-Trump levels. Frankly, this economy is going into recession. The people out of work now because of shuttered business will not be back buying goods when this crisis ends or abates. Those people will have bills to pay and savings to try to rebuild -- they won't have the money to splurge on junk from China, new phones, TV's, other appliances, cars, sporting events and eating out. We just have to hope that the recession isn't too deep or too long. Plus -- there are a lot of people who will have no job to which to return as businesses either contract or shutter totally. Trump's utter stupidity and that of those around him -- the Kudlows, Mnuchins, Miller, Kushner and the rest of the clowncar have dragged this country down in every possible way and we are all going to pay the price for the stupidity of the people who put Drumpf and Dense in the office in the first place.

  98. The US economy depends on faith in the dollar. The Fed giving the impression it is responding to Trump, a serial bankrupt and mis-manager, risks that faith. At some point when dollars are printed to pay off dollars (debt) the world will question the stability and integrity of the dollar. This could end Fed ability to control interest rates. If long term rates rise in response to a sort of house of cards ponzi scheme we risk that a larger percentage of tax dollars will be used to pay interest on accrued debt rather than addressing infrastructure, social safety net and other needs. This risks an interest rate spiral in the wrong direction. The Fed's move under a trustworthy president would carry little risk. Better to have announced issues of a 50, 75 & 100 year bonds and leave rates alone until Trump shuts up.

  99. @JT - John Tucker: Printed currency is a shrinking portion of the total. Now currency is created electronically when the Federal Reserve Bank buys back federal debt.

  100. @JT - John Tucker Actually the US economy depends on demand. The dollar, and faith in it, are just how we keep track of the demand. And the demand is what fuels the upward trickle of the wealth. So this situation, which mandates reduced demand, is different than previous slowdowns. First, the poor will suffer, then the wealth will gradually stop flowing up, then the corporations will miss payments on debt, then the banks will fail, the Fed will step in, and everything will be just fine. Ain't consumer capitalism grand?

  101. @JT - John Tucker I completely agree. I moved my 7 figure portfolio to 100% cash spring 2018 precisely in anticipation of a Trumpian incompetency crisis like this (it could have been war with N. Korea, or the trade war escalating way out of control, or any number of things). the fancy name for this is "exogenous risk". This public health crisis will touch everyone. Already, people are talking about mailing checks to everyone in America. At some point - we don't know when - all this printed money will begin to lose its value. People can't make ends meet in the "paycheck just in time" gig economy? Wait until their currency loses 10% of its value every week through hyperinflation. The people in the red MAGA hats will suffer regardless of what their Dear Leader says. But they won't learn; they'll blame China, or liberals, or people of color, or atheists. Stay tuned for martial law and postponement of elections as Trump panics at his cratering poll numbers. The Republican embrace of Mar-a-Lago fascism is going to spark the revolution Sanders says we need. A bitter reckoning is coming. Brace for impact.

  102. Failed to mention the fear inspired by any of Kudlow's positive proclamations. The markets consistently behave in opposition to his prognostications. I think it is probably a good time to begin to buy in, but Kudlow's advice gives me pause.

  103. @JT - John Tucker ----I stopped listening to any Republican when Reagan said "Govt. is the problem".

  104. It commendable that the Fed is doing all it can to prop up the stock market. It would be such a shame that after running a massive federal deficit for the sole purpose of giving the rich a tax holiday and propping up the market we see that money simply evaporate. That said, the hardest hit will be true small businesses. The little karate studio. The independent coffee shop. The bed and breakfast. The dentist. To them the massive Trump deficit has brought little benefit. Few will survive “social distancing”, and neither “quantitative easing” nor slashed “discount window” rates will make any difference. Is there any help for them?

  105. @R Rhett When tRump loses this next election, watch how much money he (and Jared, Ivanka, etc.) will be able to borrow for their obscene "businesses" (criminal enterprises).

  106. The reason 2008-2009 Fed actions worked were twofold. First, there was some wealth that was not lost in the crash, secondly, the Fed waited until the crash had progressed for a good 15 months before flooding the market with liquidity. The reason it matters is because you don't want to give liquidity to an entity which is insolvent, because the insolvent business will absorb all the extra loans and still go bankrupt, setting the economy for even bigger losses in wealth. A business that survives on periodic injections of credit is known as a zombie business. There are a lot of those in Japan and China. The Fed's flooding of the market may indicate that it sees this episode as a purely liquidity crisis, it may be mistaken because some of the underlying businesses may not be able to make it post-crisis because they were just part of the bubble economy that went away for good.

  107. @Rahul "The reason it matters is because you don't want to give liquidity to an entity which is insolvent, because the insolvent business will absorb all the extra loans and still go bankrupt"..... That is exactly correct. Save that which is worth saving.

  108. As we move into recession, the Fed will have no tools left. This will certainly deepen the recession. Furthermore, it didn't work now, because it doesn't affect the pandemic. There has been very little help for the average American, who needs it desperately.

  109. While these steps may ultimately calm a volatile stock market, where are the adjustments for the working poor and the low-income unemployed and fixed income seniors? The next few months will certainly be challenging for all of us. Our economy is going to take some drastic hits. The people will definitely be affected and our government needs to find creative ways to make us whole, or help us in some way. Any gesture at this point would be greatly appreciated.

  110. This move won't do anything to help the majority of hourly workers like me who are losing most if not all of their income due to cutbacks. Many restaurants are closing their dining rooms and limiting their business to "take out" orders only. The servers and cashiers that work in these places are being told to stay at home and their incomes are now ZERO. I work as a cashier at a fast food restaurant and I received a call yesterday saying that my hours had been cut and to just stay home until further notice. So I'm in a state of limbo where I'm still employed but won't be getting a paycheck and I'm not alone. Only the cashiers who work the drive through window are being scheduled for work. All the others are being told to stay home. I drove by the restaurant late yesterday at what would normally be a busy time and the drive through only had one car waiting to pick up an order. So shutting down the dining room has hurt the drive through business severely. This restaurant normally gets 70% of it's business at the drive through window and if that doesn't continue I suspect the entire operation will close down in another week. So the FED's actions won't help me and neither will the payroll cuts because I won't be receiving a paycheck and I'm not in a position to apply for unemployment since I haven't been laid off. What I see happening is a domino effect. All these people who suddenly find themselves w/o income from their job aren't going to be spending money on fast food.

  111. @Mr Robert You write very well for someone in your employment situation. You must truly love your work, otherwise, undoubtedly, you would better yourself.

  112. Either way the stock market goes, I lose as a normal person. So if that's the case, I don't mind seeing the oligarchs panic about their hedge funds. The stock market could dip another 20%, let it slide. Ask me if I care about the job market.

  113. @Nicholas So you want pension funds to fail. You want people to take capital losses and not pay taxes?

  114. @DL I do not care if this rotten system burns to the ground, I will dance on the ashes.

  115. Mr. Powell must (1) either believe in perfect foresight or rational expectation arguments to have drastically cut the rate to practically zero. and at the same time adopt various measures of quantitative easing so that the market will not have to speculate when the interest rate will be cut again; (2) there are some financial institutions in distress from their hedged positions, and the virtually zero interest rate is designed to save them from further calamities.

  116. With the latest economic data coming in from China on the effects of Covid-19 on it's economy, I note that one of the few bright spots seems to be related to the money that the Chinese have already dedicated to building-up it's infrastructure. It is clear that that money is being spent not only on providing financial support to major companies, which are involved in the various on-going major construction projects, but the money is also providing solid and longer term job support for a large segment of it's population; which in total, is providing a cushion to the economy during a downturn. I also recall that during the earlier years of the 1930s Great Depression that one of the brightest, most successful and wisest measures that the new incoming Roosevelt Administration undertook was instituting the WPA program, across the country. Even a casual look at the history of the WPA tell us that it not only helped kick start a hugely depressed economy, put many, many out of work men and women back to work,but just as importantly (or even more so) helped lift the spirits of the nation at a time of widespread fear and near panic. My question for this Administration and Congress is: Rather than trying to kick start a failing economy through dubious financial manipulations, Isn't this exactly the time to be thinking of getting serious about providing public monies for revamping our own crumbling infrastructure- If nothing else to provide for solid and well paying jobs?

  117. @birddog Not happening as long as McConnell's wife is transportation secretary, except for Kentucky.

  118. The Fed has done all that it can do and now needs some leveraging help. The market will only turn around once governments around the world enact synchronized commitments to do what it takes, ie, "spend what it takes" in order to get their economies moving again. As what happened here in Canada in the election a few years ago, they'll find the public doesn't care that much about rising deficits. If all governments raise their deficits at the same time - remember Trump's is $1 trillion and rising fast - the market will accept these. If the spending includes infrastructure, that will be good. Ultimately, the coronavirus crisis and accompanying financial crisis will give cover to governments to boost their deficits. But this financial crisis won't be dealt with until the Fed gets some help from governments. That should be coming shortly.

  119. In a year of incredible events, this move by the Fed fits right in, but it seems the economic damage is already playing out. The U.S. economy is still essentially reliant on consumer spending (though not on bulk purchases of toilet paper and hand sanitizer as much as cars, appliances, houses, gadgets, and all kinds of services from hair cuts to legal fees. When consumers are home-bound, the big spending stops and the effects do not trickle but gush out in the form of lost jobs and shuttered businesses. There's nothing the Fed can do to reverse this course, yet it sees no choice but to pull out all the stops. Meanwhile, is this or is it not in effect (once again, as in 2008-9) a massive transfer of wealth to the investment class and America's wealthiest families?

  120. This is the “liquidity trap”. Lower interest rates are supposed to stimulate business investments, but it’s not the sole determinant. More important is the demand for goods. Nothing can get people out to buy goods. I can increase incomes, and that won’t lead to more buying. This is way outside normal. The only tool left is government spending. Tax cuts won’t increase spending either. Only maintaining income of those without any income so they can buy essentials, and government spending ( especially on medical) can help maintain the economy. But republicans are opposed, because... I don’t know.

  121. @Kyle Medical spending will not increase demand for a travel agency or an airline, it is a different part of the economy. If a big amount is spent on creating health capacity today, it may all go to waste next year because this kind of epidemic comes every 100 years. The US already mis-spends a lot of health dollars, giving priority to emergency medicine over preventive medicine and spending large amounts in the last 6 months of natural lives rather than the first few years of a child's life. Government spending is not free, it is a form of taxation on the coming generation which is already groaning under the load of student loans and social security and medicare which are basically sophisticated ponzi schemes, which seek to pay one generation by taxing the next one and function as long there are more payers than beneficiaries.

  122. @Rahul nothing will increase the demand for those. But demand in one area spreads to others through every spend and earn cycle. But lack of demand can’t be done by consumers right now, only actor is the government

  123. And now the Feds 'gun' is all but empty. Seems to me I've read quite a bit about the possibility of this happening because of Trump's efforts to suppress interest rates from real economic experts like Paul Krugman. We can only hope that he and the others are not as prescient about what is likely to follow... but I doubt it.

  124. Without federal spending to support at risk businesses and displaced workers this will have little effect in stemming a significant contraction in the US economy.

  125. You know - I'm not a financial expert, but this isn't an economic issue - it's a "Here comes the asteroid!" issue. There IS no "economy" at the moment and won't be until the public can wrap it's head around exactly what is happening or will happen. Stuffing low interest rates into the hands of passengers on the Titanic would not have stopped it from sinking. If Trump had anything in his head other than a gigantic image of himself, he'd have the treasury start cutting $1,000 checks and mailing them out to every man, woman and child in the country. Starting tomorrow. Every month until the horror passes. They will spend it. Immediately. It would be an instant cardiac needle to small businesses and local economies, and cost chump change compared to the seed corn he continues to hand out to his golf buddies. But he doesn't, and he won't and the smoking debris field will just grow and grow. Good times. Good times.

  126. @gdurt Excellent analysis that presents a robust solution. Thank you!

  127. We have institutions that can sweep in and save sickened businesses that can act instantly. Our health? Not so much. For all the talk, actions show which is more precious.

  128. It's striking to me that the Trump administration seems only to care about the stock market. While constantly downplaying the threat to public health, they've pulled every lever at their disposal to try to protect investors. If they had acted as decisively to create a massive testing program, we might have been able to contain the virus. Instead, the plan seemed to be to keep the numbers down by requiring that all testing be made through the CDC and installing a protocol that severely limited who could be tested. Even now, the federal government is scrambling to pull together a large-scale testing program. The prospects of tens of thousands of deaths (or more) did not get their attention. A plummeting stock market did. This does not bode well.

  129. @Joe M. It's like putting gas in the car's tank but the car has no wheels.

  130. "Mr. Powell has a big advantage over the former chair Ben Bernanke from a dozen years ago: He and his colleagues have had all these years to study, assess and build upon the tools that the Bernanke Fed invented and deployed to combat that crisis. “We think we have plenty of policy space left, plenty of power left in our tools,” Mr. Powell said on Sunday. Over the coming weeks, the world will find out if he’s right." Mr. Powell has another big advantage - even though many of the interventions during the last collapse began during the Bush Administration, once Obama was inaugurated, the GOP swore up and down that all of this was unacceptable. Now that their party's in the White House, and now that they rammed through that big tax giveaway that's boosting deficits, anything goes if it comes to the aid of their party. But a question - if the Fed is making money cheaper to borrow, yet banks are hoarding cash as the article mentioned, is there a tool in place to force banks to move that cheap money out of their hands?

  131. In 2008, the US experienced largest financial shock since the Great Depression- a consequence of decades of neoliberal economic policies. Since that time, rather than addressing the structural economic problems that created the 2008 crash, the FED provided >$5 Trillion of ultra-cheap money, which along with Trump’s 2017 tax cuts, have been used by Wall St. for share buybacks, purchasing stock futures and to sustain [still] insolvent banks. This money inflated equities, bonds and trendy real estate in Boston, NYC, SF. As a result, Govt debt > $23 trillion and growing $1 trillion/yr and corporate debt exceeds $10 trillion, while the Pentagon confronts astronomically expensive looming strategic debacles in Afghanistan, Iraq, Libya, Syria and Yemen. To this, we can now add Saudi-Russian oil wars, which are depressing energy prices and threatening the very survival of the US shale industry and their creditors. Thus, the FED has created gigantic bubbles in equities, bonds and real estate, whose value has become disconnected from economic realities. Fed Chair Jerome Powell is continuing the orgy of money printing and debt creation, ignoring the fact that continuing economic stagnation in the global economy is a consequence of excess capacity and slack demand. Unfortunately, more rate cuts, asset purchases or propping up dysfunctional Repo markets, does not resolve this problem, but rather is postponing the proverbial ‘day of reckoning’.

  132. @Paul - Paul, thank you for this thoughtful and reasoned explanation of what we're experiencing. In 2008, American taxpayers gave billions of dollars to bailout banks and corporations. Those companies then used that money not to help American citizens..but to make MORE money for themselves and their shareholders. As a result, millions of Americans lost their homes and their place in the middle-class. Today former middle-managers drive Ubers and stock shelves at Costco while hedge fund managers buy $100 Million NYC penthouses. The Fed's response is to throw more money and grease in the wheels to keep it all going. Our economy is a house of cards. A day of reckoning is inevitable.

  133. @Diane Bancroft IF the banks had failed, you'd have seen worse outcomes. The banks paid it back with interest. I see nothing like that in just lowing rates to zero because low rates didn't save the banks, cash infusions did. What's needed now are medical services, test kits, vaccines and treatments. But when you wait for central planning to react, you know you'll suffer greatly.

  134. Neo-Liberal politics? Who was in charge during times of a financial crisis? How easy one purposely forgets to prove a wrong point. It has always been the Big Banks and financial institutions with equal help of America’s corporate “pornographic” greed. And always helped by the leaders in both parties who wouldn’t be leaders without corporate manipulation and moneys. And as always, the victims then and now, will and always be ordinary American citizens who always end paying the bills for abuse by banks and greedy power hungry corporations. And this has been going on for centuries and will not stop until there will be a real representation of all citizenship. Kick out the money lenders, the army of slum lords and snake oil salesmen Pharma, the religious and cult profiteers, the war industrial mafia, Wall Street and you fill in the rest ...

  135. I don't get this - it's not a credit issue, it's a demand issue. Everyone is indoors. No one is going to restaurants - who's going to take out an SBA loan to buy a Popeye's franchise right now? Add to it that many many workers are being hurt - and primarily those who are in vulnerable service roles with poor protections. Spoke with a cabbie in NJ yesterday who said he had one fare all day. Spoke with an Uber and Lyft driver who says fares have fallen to 1/3 what they are normally - yet they still have to pay for and maintain their cars. Spoke with a restaurant worker/bartender who is being sent home without pay for the next two weeks. We don't need to feed corporations - all they will do with credit is take out zero interest loans to buy back their stock at record low prices, helping literally no one but the remaining shareholders. What we need to do is support the workers who will lose income - make sure they can pay their mortgages, buy food, and rebuild their lives to drive our economy forward once the virus blows over.

  136. @Common Sense because if the markets are down 70% instead of 40% you will see massive municipal, pension and corporate bankruptcies. Every pension plan in America is invested in the market. And those pension plans do represent workers.

  137. @mike Municipal pensions, because of restrictions on the way funds are allocated, are highly affected by low yields on government bonds.

  138. @mike Yeah, that bartender sent home for two weeks doesn't have a pension. I don't have a pension. What percentage of Americans do?

  139. The coronavirus outbreak will change how America does business now and into the future. It has pulled the scab off our mishmash healthcare system. It has focused attention on those among us who serve the public and are at the low end of the wage earner ladder. We are simply not equipped to meet this crisis. Our public discourse in the political arena only contributes to the misinformation surrounding the disease. The truth matters all of the time, but is crucial in the time of crisis. This fact has yet to permeate the head of Donald Trump. I fear we are so far down the road of political discourse, we may not have a Congress capable of leading us from the brink of recession. We bailed out the banks in 2008 after their reckless behavior cost average Americans their jobs, pensions, and homes. The auto executives took the money back to their factories in their private jets which flew them to Washington. Corporate America has gotten its bailout with the reduction of the corporate tax rate. Had they put the windfall in a rainy day fund rather than buying back stock, their monetary position would be much better today. We are going to have to run higher deficits to get the economy back on track, but those monies will need to go to the pockets of workers and small businesses, not the corporate giants.

  140. @allen roberts Reverse the tax "cut".

  141. The Fed is fighting the wrong war: The 2008 crisis was financial and secular, i. e. investors perceived a liquidity problem in the financial system. The 2020 crisis is one of executive leadership and spiritual, i.e. investors don't have faith in the leadership. This is the wrong army deploying the wrong weapons. We need to transform the leader or replace him.

  142. @F. O'Brien Central planners never make the best decisions. The more you put faith in authority, the worse your outcomes will be.

  143. Someone on NPR this morning likened the Fed's response to seeing fire trucks respond. One can either think--it's a good thing the fire department is taking care of us, or they can think, that must be a huge fire to have caused that response. I think the Fed has now sent the last truck from the station; even the 1929 Model T that they use only for parades. Ask the people of Paradise, California how they felt when the last truck left the station.

  144. Everyone makes the same mistake about trump's Fed. Lowering interest rates won't affect 99% of Americans. You won't see those lowered rates are your credit cards (although you will definitely see them on your savings accounts). The Fed's only goal is to keep the stock market from imploding long enough for billionaires to move their money elsewhere, and coincidentally grease the wheels for them to buy back in at pennies on the dollar when the economy does finally crash. They have plenty of experience with this sort of thing; the billionaire class grew their wealth tenfold in the last 12 years. Did you?

  145. @Steve Well, the richer you are, the more you'll also lose as the markets crashed. Did you lose millions or even billions over the past few weeks?

  146. @Steve It's not the Fed's job to fix everything. They are only resposible for financial system stability and the employment rate. The Federal Government must now step in with real stimulus and an improved safety net. Trump's performance here is dismal and may very well spell the beginning of a depression.

  147. How will the Fed's action assist the plumber or carpenter or the wait person? These people have no safety net except perhaps un-employment assuming those offices will even be open. For the majority of Americans, the action by the Federal Reserve will mean nothing. Absolutely, the recession or more is here!

  148. How about credit card companies extending some generosity here, lowering interest rates? And perhaps some forbearance on late fees for people who will be losing income?

  149. @Tibby Robertson And stimulus checks from the government directly to consumers.

  150. Like 2008 the problem is demand, or lack thereof. Providing cheap money for businesses does nothing if average people are stuck at home not buying anything. Then there are those who are losing income by being sent home from closed businesses. They can't spend money they don't have. I wonder what studies will indicate about the economy when all this is over. Back in 2005 through 2007 it was found that businesses closed or destroyed in the region effected by Hurricane Katrina didn't come back if they were forced to stay closed longer than 6 months. Those that managed to reopen quickly thrived. What will we see in large cities where bars, restaurants, movie theaters and other businesses may be closed or virtually empty for an unknown amount of time?

  151. I never imagined that a public health crisis could be addressed by using Monetary Policy. Equally, I never imagined before 2015 that Donald Trump could become President of the US. I will have to start thinking that democracy can take us through unimagined, though not always highly desirable routes.

  152. The Fed has run out of sugar. And what will happen when the time (hopefully) comes to raise the rate?

  153. At last night's debate, Biden correctly said that the banks had to be bailed out in 2008 to protect all depositors' savings, even and perhaps especially the smallest. He may have been referring to the FDIC, created in 1933 under the FDR aministration to protect those accounts from bank failures. Increased to $250,000 under Obama,, I fear it may now fail or be abolished. There have already been reports about relaxing the Dodd -Frank legislation, which increased the limits.

  154. "The Fed on Sunday stepped into its role as the global lender of last resort" What an absurd statement. The only entities that borrow from the Fed are so-called "depository institutions". You, me and 99.99999999% of Americans are not privy to borrowing from the Fed at the "Zero Percent" rate. The "depository institutions" will get this rate an they will funnel the money to their trading desks to cover their bad trades over the last three weeks. It is akin to going to a casino and having an unlimited maximum bet size.....eventually you will win your bet (aka trade). This has nothing to do with the average American...and everything to do with protecting the "depository institutions" and bailing them out of their bad trades.

  155. @John The statement is not absurd. If a bank loses the ability to pay its depositors, the depositors lose their money. So the lender the last resort props up the banks so that my checks and my debit card purchases will be honored. I see nothing absurd about that. And no, I do not borrow from the FRB. But by definition, the interest rates banks charge retail customers like me are higher than the rates those banks pay to borrow money from the Federal Reserve. So a decrease in the rate they must pay the FRB means a decrease in the rate I must pay the bank to borrow money.

  156. @Quiet Waiting "If a bank loses the ability to pay its depositors" Question: Why would a bank that borrows money at Zero percent and lends money at much higher rates not have the ability to honor deposits? Answer: As we learned in is because these banks also run trading desks that trade obscure products like mortgage-backed securities, asset-backed securities, collateralized mortgage obligations, collateralized debt obligations, and various other derivatives and swaps in which 99% of people can not fathom. When these trades go bad, the Fed comes to the rescue.....under the guise of protecting "depositors" like you and me. It is a wonderful scheme for the wealthy when You Can't Lose.

  157. @John It can be both true that large swathes of finance and banking should be social-democratically managed AND the federal reserve did the right thing here to stem the slide toward armeggedon.

  158. This is the right solution to the wrong problem. This is not a financial crisis. This is a demand shock. A supply-side solution isn't going to help anyone here except the bankers. Even then, it will only help them in the short run. The only way to prop up a demand reliant economy during a demand shock is to prop up demand. Send everyone a check for 1 months pay. Bet the economy makes it through just fine.

  159. This is a nutso move. During a pandemic people are staying home and not consuming. The reduction in economic activity is the result of the pandemic not the availability of money. We may want to look to advanced countries like South Korea,and how they have responded to the pandemic. They test more people in one day than we have tested since it began. Their tests,and hospitalization costs are free to the patient. We may not be the smartest nation in the world when it comes to dealing with a crisis Time to make America great again

  160. Geez. Interest is 0%. We should all go buy 4k UHD TV's. If only there was a game on TV to watch! Now what is more likely? That an American company will spend a year building more TV factories in the US (without a supply chain for the construction materials) using the zero percent rate or that a foreign company will buy the American manufacturer using the zero percent rate?

  161. When will Trump and the Fed realize that it is all about the virus? Trump keeps on lying about the new efforts by the federal government, making them sound bigger and better than they are. Furthermore policies are very poorly implemented by the administration. Trump has no empathy for the vivtims of the virus. His only concern is the stock market. Powell shows no backbone and is merely rubber stamping Trump's wishes. A complete failure.

  162. From threatening to fire the Fed's chief, to launching a Blitzkrieg interest rate cut--it all's of a piece, and it all smacks of Donald Trump's way of doing business. It's spectacular! It's tough guy-ism! And it's again pushing our precious democracy closer to the abyss of vicious totalitarianism.

  163. STEP 1 Reverse the tax cut given to anyone earning over $200,000 - Let's get some ammunition back.

  164. More debt..... I'm pretty sure isn't the answer.

  165. Trump can motivate the unsophisticated masses, but he’s terrible at calming Wall Street. Every move he’s made over the last several weeks has resulted in panicked selling. We can’t move up the election, but we can invoke the 25th Amendment, on the grounds of mental deficiency.

  166. I think the Fed blew its load prematurely, will have little effect on the economy and will empty its toolbox for any future adjustments that need to be made.

  167. What's left? Well look for the Fed to buy equities. This will push a false sense of stability and will destroy the markets and the US economy for decades. This is what they did in Japan in the 90's and is why they are still in a recession 30 years later. Trump is so self focused, inept and ignorant that he will push this option. There is no doubt that he will sacrifice our future for his own short term gain. Its time to prepare for the worst because we have the worst possible person at the helm. The only upside is that this is the end of Trump. He is toast but the stain and the stink will likely never leave. Just be sure to remind your neighborhood Trump voter every time they complain about the Dems...

  168. Well, there goes the myth of an INDEPENDENT Federal Reserve, another vital criteria for a democratic (i.r. non-dictatorial) government. Powell, despite his assurances to the country, is showing himself to be just another Trump laky. What in the world does the Stock Market have to do with fitting Coronavirus or helping people and companies get through this...

  169. Look on the bright side. It was unload all your bullets or have the Fed Chairman terminated for inaction yesterday by our fearless leader. Which would have been worse?

  170. No body cares about the interest rates falling down to zero if you can't go to work because your job is now furloughed or has ended (got texts from 4 friends who are now without jobs until August); they need to pay rent, mortgages, buy groceries and worst, they have no idea what to do about healthcare in the middle of this pandemic. The Trump Party and his Republican puppets owe to these Americans people to come up with policies for real people. Shame on them.

  171. This is like the movie "Hot Fuzz" when PC Butterman asks "Have you ever fired your gun up in the air and gone 'ahhhh!'?" The Fed has emptied their magazine for no foreseeable value. Money would be better spent providing targeted continuity funding to the specific industries that are hardest hit and will be required to be operational when this passes.

  172. If the federal government gives back all the money that was lost over the past few days, either in 401Ks /investments and/or work stoppages, that is the only thing that will restore any semblance of confidence. If 50 people literally own 10 Trillion, they better be willing to part with most of it, or it is going to get very ugly soon. AND WE NEED TO GET THE CHUMP OUT OF OFFICE. There needs to be more of a generally strike until he and pence are GONE!!!

  173. In 2008 we had some pretty smart people in charge. Now, we don't. Trump is consumed by his reelection chances and therefore the economy. Powell is a weak man consistently giving in to Trump's tantrums. The Fed is quickly running out of ammo. The hallmarks of the Trump admin -- corruption, sycophants, second-raters, self-absorption -- will come to haunt us all.

  174. "We gonna win so much you may even get tired of winning and you'll say please, please Mr. President, it's too much winning! We can't take it anymore!" -- Donald Trump, 2016 Who else is sick of winning?

  175. We're giving rich people money. How about we give poor people money? I guarantee you they'll spend it.

  176. Bush wasn't everyone's idea of the perfect president, but he wasn't actively trying to sabotage the US government for his own financial and political benefit. Enter Donald Trump ……….

  177. No Bailouts for Banksters. We know how that works -- bonus millions for CEOs, and higher taxes for the rest of us.

  178. Unless the Federal government vis a vis Trump and his minions get their act credibly together and absent the now signature divisiveness and floundering the FED and Congress will be fighting a ragged rear guard action in the wake of Covin 19 and the panic that keeps rearing its ugly head. The latest episode of major incompetency has been the handling of the flood of returning Americans from Europe and other area across the globe. More similar episodes likely to come as this epidemic really take hold at home.

  179. Ignorance is bliss, but shouldn't be your economic plan. When you hit the rapids, you want to react with skill, with firm deliberate moves, panic and you will be in it up to your neck.

  180. Jay Powell strikes me as one who is measured and reserved: private school, Princeton, Georgetown Law, Dillon Reed, partner in the Carlyle Group. What do you think it's like to pick up the phone every day of the week and listen to the "stable genius," who is in fact a raving lunatic? Personally, I think he decided to throw in everything the Fed had (which is not much at this point) so he doesn't have to hear the sounds of a mad man any more.

  181. A Trump knee-jerk, the Dow drops, lower interest rates. Oh, whoops, the stock market dropped like a brick the next day and interest rates are at zero. Trump is probably ripping his comb-over out. What could possibly have gone wrong? Well Donald how about dealing with the coronavirus that is actually causing the problem. Trump says it is all under control and then Dr. Fauci contradicted him and said it is going to get much worse. Trump is just sure the American people, who, he thinks, worship him, will believe every word he says. Yet the leadership in the WHOLE rest of the country, governors and mayors, Democrat and Republican, are issuing orders that make it clear that they expect the pandemic to get worse. Yet Trump marches on with his lies, oblivious to the real experts around him. And the stock market will continue to drop until the de facto leaders of cities and states manage to decrease the infection rates.

  182. If you want a better understanding of what's going on in finance, skip the NYT and stick to the WSJ. And quit complaining. I get it, but seriously, let's play the cards we have now since we're stuck with them and focus on you, your family, helping your community. Those are things you can personally do that will have a positive impact on this situation.

  183. I wonder if any of this is related to the fact that the "businessman" that we elected as our President had a life-long history of bankrupting his own business? Just askin'....

  184. I think Biden had it right. Trump has distributed the 'seed corn' to the wealthy.

  185. If Trump had any self respect he would apologize for his blunders and resign- TODAY!

  186. If anyone needs a reason to oppose the re-election of Trump this is it, right here, right now. Trump and the GOP have gone on a binge and there's little ammo in the Federal Reserve arsenal. It does not take an economist to realize what this inept President would do with the next Federal Reserve appointment. Trump is exactly the reason the Federal Reserve needs independence and non-interference from the Executive Branch. The President is unsafe at any speed.

  187. Looks like there's a Panic at the tRump Disco and maybe it is time to think about rescinding the TAX CUTS? Turn the clocks back three years for tRump savings time? What Fed Chair Powell did was essentially go to an on-line dating service, pick a date, and then proposed marriage! Cutting back trips to Mar-a-Lago or quarantine it off would save taxpayers money and make the president stay in Washington? Oh wait, that won't help matters at all!

  188. It is not clear to me how The Fed can provide “liquidity” by “buying” government debt. Where does the “cash” come from? Printing more “dollars” (while our cash becomes more worthless) as we add to our incredible huge debt levels? How does this help?

  189. Trump is failing test after test of his presidency and making things worse with his emotion, ignorance and dishonesty. The Republicans need to act sooner than later to replace him before it's too late. Trade will not resume normally with Trump in charge, demand cannot come back without a bailout for the American people (paid sick leave for starters) and rich people will not reinvest without a health economy. All of this is happening and foreseeable, act before it's too late.

  190. Make no mistake, Trump bullied the Fed into taking this action. Whatever happens to the economy, he now owns it.

  191. I think that Powell has had it with Trump's admonitions and he knew that dropping the rate to zero will most likely not be effective. My hunch is that he did it anyways to shut Trump up and help make sure that he has no chance to be elected for another 4 years. Smart move.

  192. Those tax cuts sure are handy now.

  193. This doubling down of the interest rate cut has Trump stink all over it. The .5% previous rate cut didn't work. What made Powell think doubling down (tripling down !) the rate cut would work ? Trump. Trump basically told Powell he would remove him if he didn't do it. So Powell acquiesced, and cut the rate knowing full well that it wouldn't work. Then he holds a press conference to say that he has plenty of tools available to help the economy, even though he just used up the biggest one in one fell swoop. I have Zero confidence in this group of incompetent individuals to tell the truth or to do what is necessary to help the average person.

  194. While the Fed is busy rescuing billionaires the Government ,aka Congress , is fiddling and fumbling around with a bill to help the most vulnerable Americans who’ll may lost there jobs due this pandemic. Lest Congress forgets , we as Americans should be reminding the Presidents enablers about the billons of dollars in hard cash shipped to Iraq on skids that was used as ”walking around” money to buy the “hearts and minds” of the Iraqi people. Billions for billionaires but now with all the shortages in stores we can hardly get a piece of cake.

  195. Trump the Genius Financial Mind got his wish Sunday. Monday came and the market crashed. This shows how incompetent the US government is with him at the top. And if folks think things couldn't get worse, wait. Because neither 45 nor the Fed have a clue about how to fix things. Why not just give each poor family, say one whose household makes less than $20,000, a check for $2,000? They would spend it wisely and quickly. They most likely don't get health care insurance nor sick leave. That would lubricate the economy. Why not implement an immediate infrastructure plan on ready to go projects? That would keep engineers, supply chain professionals, construction workers, equipment manufacturers and raw material providers employed. Instead my Democratic party delivered an anemic response to the crisis on the par of the incompetent Trump.

  196. Well, at least the republicans in office led by our apprentice in chief didn't add ~$1.5T of debt to our balance sheet during the economic recovery started under President Obama. Just imagine how constrained our fiscal response might have been otherwise. Or undermine confidence in the federal government's career bureaucrats, 'ceptin' of course the Deep State ones who needed to be outed. Or strip the government of key inter-agency resources capable of coordinating an effective response to the pandemic. Or downplay the seriousness of the outbreak two months ago; great it was almost airtight containment. Or ... Oh, they did. Never mind. Good republicans can now go back to listening to Rush Limbaugh, Fox News, the WSJ editorial board and the other right wing twits praising the republican response to all of this. That's how we'll re-establish faith in the government and its ability to deal with crises. Or not.

  197. We have a man-made recession that has finally popped the bubble of excessive corporate debt, wage suppression, and heavy reliance upon consumer spending, combined with a continued decline in manufacturing. Wall Street can "blame" it on coronavirus, but the reality is Wall Street has been living in irrational exuberance since it propped up a serial bankrupter/ con man / malignant narcissist with a big mouth to lead the country. They were rewarded with deep tax cuts and artificially suppressed interest rates that let them buy back their stocks en masse to improve their prices and reach record highs, and borrow even more with impunity--all while claiming that Trump's and his toady Republican party ineptitude such as trade wars doesn't impact the stock market. As with everything in today's US Idiocracy, it works until it doesn't work.

  198. Whenever I see th federal government coming to th aid of the big banks and business in general I'm reminded of 9/11 and the unification of ALL in that horrible time. No planes were permitted to fly that week, with few exceptions, so th major airlines were gonna get hit very hard as a result. So Congress decided to give away Billion$ in corporate welfare to temporarily help th ailing industry.The Democratic majority Senate and Repub majority House almost unanimously allocated billion$ into their coffers whether th airlines were in trouble beforehand - as some were - or not. W gladly signed onto it and so, what did th major airlines do with this wonderful, patriotic taxpayer giveaway... in th next few days they handed out over 5,000 pink slips to many in their workforce! Isn't "Capitalism" wonderful?

  199. No bailouts this time. Let these large corporations go bankrupt and start over again from scratch, just like American taxpayers do.

  200. Well, at least trump can no longer attempt to blame the Fed for the disaster he has allowed to occur because he preferred to wish the coronavirus away rather than take a leadership role in mitigating it.

  201. I have to wonder how much insider trading is happening here. Are Trump and in his cronies being given advanced notice?