The United States suddenly announced a 1% rate cut
The Fed suddenly announced this morning that the committee members cut the interest rate by 1% with an emergency sharp reduction of 9: 1 votes, lowering the target range of the federal funds rate by 0% to 0.25%, returning to the 2008 low, and promising to maintain this interest rate Until we are confident that the US economy can withstand the impact of the new coronavirus epidemic. In addition, the bureau also restarted quantitative easing, referring to the purchase of US $ 500 billion in treasury bonds and US $ 200 billion in mortgage-backed securities in the coming months, and promised to reinvest all the bonds after maturity. With regard to the recent tight liquidity of the US dollar, the Federal Reserve will work with five central banks including the European Central Bank to lower the interest rate of the US dollar swap agreement by 0.25% to ensure sufficient global liquidity of the US dollar. The Fed’s emergency actions have not yet seen stability in the market. On the contrary, it has increased market concerns about the new crown virus epidemic disrupting the global economy. Market risk aversion continued to drive the performance of the US dollar in the short term. However, one of the Fed ’s actions is indeed believed to reduce the attractiveness of the dollar.
At the same time, Canada announced a 5% interest rate cut!
The Bank of Canada announced an emergency interest rate cut by half a percent last Friday and lowered the official interest rate to 0.75%. This is the second time that the Central Bank cut interest rates after March 4 and reduced interest rates by a total of 1%. The central bank stated that the unplanned action was in view of the negative impact of the new coronavirus epidemic on the country ’s economy and the proactive measures taken in the recent sharp drop in oil prices, and pointed to the interest rate meeting to be held on the next month At last, we announced more about the latest domestic and global economic outlook. At the same time, the Canadian finance minister said that he would spend 10 billion Canadian dollars to provide credit support to the business community and to launch more fiscal stimulus packages
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