Federal Reserve Interest Rate Cut Near Zero Due to Corona-virus Pandemic

    Federal Reserve Interest Rate Cut Near Zero Due to Corona

On Monday, Federal Reserve took a hostile step to cut the interest rates to almost zero, which accentuated trepidations of the economy tilting into a corona virus-driven decline.


S&P 500 ETFs (P:SPY) fell to 9% after the Fed cut off short-term prices by 100 basis points and assured sweeping asset acquisitions in next couple of weeks. S&P 500 futures dropped 4.77% that knocked down a daily trading limit suddenly, signifying huge losses.

Central banks in New Zealand, Australia and Japan joined the Fed in declaring striking monetary slackening in a co-ordinate exertion, which was not seen since 2008 economic decline, but was not succeeded to support the sentiments of global investor. Global stocks drop down to almost 2%, oil prices crashed and even safe-haven gold took a blow as Spain and France joined Italy in entering the virtual closing and the overall death excise from the outbreak exceeded to 6,500. 
Even on Friday The President, Donald Trump announced a national emergency and allocated $50 billion in economic aid.

The chief market strategist of Jones trading, Stamford, Connecticut; Michael O'Rourke said that "We're facing the loss of credibility of the central bank from a market perspective and when the investor community loses faith in the Fed, that's when the market gets very dangerous."

Since January 2019, S&P 500 ETFs fell to 9.6% which is their lowest.
Shares of the Bank of America Corp (N:BAC), JPMorgan Chase & Co (N:JPM), Goldman Sachs Group Inc (N:GS) and Citigroup (N:C), which are the largest lenders have fell over between 14% and 17% in pre-market trading because various analysts are afraid of lending to the business with escalating losses would fuel mistrust among the banks.

Additionally, shares in Chevron Corp (N:CVX) and Exxon Mobil (N:XOM), which are the oil majors have plunged over 10% as U.S. crude dropped below $30.                                  

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