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For those saying the Fed is running out of ammunition, study what the Bank of Japan has done. It owns close to 80% of the Japanese ETF market currently, with no end to the expansion of balance sheet in sight. After buying long treasuries, it's not unreasonable to imagine the Fed buying stocks, either individual issues or ETFs. The President would be for it, and it would be hard to drum up any opposition to it in cong…
I'm retired and mostly not in the market. I won't invest in the market while it is overpriced. With such low interest rates, what is a safe investment?
>The Fed also said in the statement that the “fundamentals of the U.S. economy remain strong.” So why cut the rate? Doesn't make any sense.
Edit: Trump has loudly and consistently attacked the Federal Reserve for scheming against him and trying to sabotage the economy, something completely unprecedented considering the Fed is famously intended to be independent. He ratcheted up these complaints even further since the outbreak of Convid-19. Then, the Fed takes the unusual step of cutting rates between sessions (for the first time since the start of the Great recession) despite a strong economy.
Edit #2: Now Trump has lashed out again, calling the Fed's move insufficient.
I'm retired and mostly not in the market. I won't invest in the market while it is overpriced. With such low interest rates, what is a safe investment?
Earlier quoted context omitted.
Why? Are you retired? Because if you aren't, if you're working and putting money into a retirement plan, you are much better off with a bear market, especially one like this that is practically guaranteed not to run for years. When you're a buyer you want prices to be low.
This assumes a return to trend, right? If stocks are temporarily depressed you can get them at a discount. If stock prices are permanently lower as a result, though, it's certainly not good for you. And, believe it or not, this is probably the more accepted idea -- that price movements are memoryless, that we shouldn't subscribe to the gamblers fallacy (that down today means up tomorrow), and that being happy for a p…
The only way that can happen is if the economy is permanently less productive. There are things that can make that happen (climate change, for example) but the corona virus is not among them. Fear of the virus is causing vastly more damage than the virus itself. The virus itself is mainly killing old, unproductive people. I don't want to minimize the severity of the problem or the emotional pain of people who have lost loved ones, but in terms of long-term economic impact the corona virus is really not a problem.
From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…
Is there any question? 80% of the Chinese workforce has been sitting on the sidelines since mid-January. Production is just barely ramping up and I don't think we'll see full capacity until well into April, provided that COVID19 is truly contained/managed.
Edit: not sure about the downvotes. Here's a source about Foxconn production: https://twitter.com/onlyyoontv/status/1234855310428430337
From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…
Fiscal policy (e.g. the government buying tanks) absolutely affects the real economy.
The central bank doesn't control fiscal policy. It controls monetary policy. Monetary policy also affects the real economy, just indirectly.
Earlier quoted context omitted.
Because someone at the top with a limited grasp of economics but a great understanding of campaigning insisted on it.
The Fed is independent of the Executive except at appointment time.