Asia’s Morning: Big Bazooka’s Everywhere

Mar 16 04:03 2020 Print This Article

Central Banks around the world appear to be about to deploy more large calibre monetary weaponry than an NRA convention. Both the Federal Reserve and Reserve Bank of New Zealand have enacted emergency rate cuts overnight. The actions of the Fed cutting the fed funds rate by 100bps to 0.0-0.25%, will likely spark of a wave of aggressive rate cuts by Asia’s’ central bank this week.

Additionally, the Fed has slashed the discount rate by 150bps to 0.25% and allowed banks to access the discount window for up to 90 days. They will also buy $700 billion in bonds, returning to QE to keep credit markets from tightening further. More than likely, the Fed was alarmed by US Yields rising at the back end of last week, even as markets crashed, suggesting that credit was getting harder to come by. A distasteful situation.

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