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Posts Tagged ‘Federal Reserve’

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

Some tough news that's likely to produce startling volatility again. Wednesday, April 1, brings the Purchasing Managers' Index from the Institute for Supply Management for the manufacturing sector. Economists are expecting further contraction in the index for March. Thursday, we'll get what is likely to be a brutal report on initial claims for unemployment with […]

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Mortgage crisis–again–as a result of the coronavirus recession and loose lending?

A mortgage crisis again? Yep. As part of a credit crunch ignited by the coronavirus recession. On top of the $2.2 billion that the Coronavirus rescue bill now in front of the House of Representatives allocated to checks to individuals, loans and grants to companies, extra unemployment insurance and more, the bill also gave the […]

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The coronavirus rescue bill leverages the Fed by $4 trillion to head off a credit crisis–you think it might be serious? Look at the credit card market

On top of the $2.2 billion that the Coronavirus rescue bill now in front of the House of Representatives allocated to checks to individuals, loans and grants to companies, extra unemployment insurance and more, the bill also gave the Treasury the go ahead to backstop the Federal Reserve to the tune of $4 trillion. That […]

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Fed to provide “infinite” money to credit markets

Today, March 23, the Federal Reserve announced that it would backstop all credit markets in the United States without limits. The Fed said it would purchase Treasuries and mortgage-backed securities “in the amounts needed to support smooth market functioning.” In other words no limits to how much the Fed will buy. That's a bigger commitment than […]

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Credit markets “sell everything” call means Fed will have to eventually support everything

In the credit markets investors and traders are selling everything. Safe. Risky. Doesn't make any difference. And that's creating a potential shortage of dollars. When you sell corporate bonds, you take dollars out of the credit market. When companies draw down credit lines at banks, they take dollars out of the credit market. "It’s been […]

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Liquidity Now!! What should be next on the Fed’s to do list: A TAF for small business

Back during the Financial Crisis the Federal Reserve set up a Term Auction Facility (TAF) to make one-month and three-month lending available to any sound bank. The point of the TAF then and the point now is to make sure credit keeps flowing to  medium- and small-sized businesses (and even households) that can have a […]

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Fed’s Sunday surprise sends stocks plunging; losses halved when trading resumes

The Federal Reserve's Sunday night "shock and awe" campaign--interest rates cut to 0% and $700 billion in bond buying--shocked stocks into a panic at the open Monday morning. With stocks down 11%, trading restrictions went into effect. When trading resumed, U.S. stocks hd recovered half, roughly, of their losses. s of 11:10 a.m. New York […]

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Stocks sell off in futures market on Fed’s surprise cut to 0% interest rates

Back on March 3 when the Federal Reserve announced an emergency 50 basis point cut in its benchmark interest rate, stock futures slumped and the Dow Jones industrial average was set to open more than 1,000 points lower on Monday. The fear that swept stocks lower was that the Fed thought the economy was in […]

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Think the Fed got everyone’s attention with a Sunday night interest rate cut to 0%?

On Sunday night the Federal Reserve announced that it would cut interest rates to 0% (actually a policy range of 0% to 0.25%) from the current 1.00% to 1.25% range. The central bank will also resume its program of quantitative easing by buying at least $700 billion in government and mortgage-backed securities. ($5oo billion in […]

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Saturday Night Quarterback says, For the week ahead expect…

...everybody in the financial markets to be trying to guess what the Federal Reserve will do at its Wednesday meeting. Despite the Fed's emergency 50 basis point cut in interest rates, there's still a considerable body of investors and traders who think the Fed will reduce interest rates again on Wednesday. The CME FedWatch tool, […]

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