Coordinated
October 8th, 2008 7:22 am | by John Jansen |The Federal Reserve has just slashed the funds rate by 50 basis points and has been joined by several other central banks who have also cut rates. The statement by the FOMC recapitulates several lines from Bernanke’s speech of yesterday.
It will be interesting to see how this unfolds. Stock futures turned around in the aftermath.
2 Responses to “Coordinated”
By fredw on Oct 8, 2008 | Reply
Well , the futures pop from the 7 am moves has faded fast… could be the fact that the UK actions to recapitalize their troubled banks failed to inspire. Credit rates are higher today , whether you look at overnight , one month or three month… looks like 50 bps was not viewed as shock and awe. Or perhaps just the realization lowering rates doesn’t effect whether banks trust enough to lend or whether borrowers qualify / desire to borrow…..
By fredw on Oct 8, 2008 | Reply
Yeah , the Fed cut 50 bps but look how quickly that’s been taken back today. Dislocation shown by huge demand for two year ( but especially one and shorter ) paper versus anything longer than 2 years. Dislocation across curve for 2- 30 year paper… 40 billion in supply today and much more on the way. Yields will be charging in the wrong direction as far as Bernanke is concerned…..