Federal Reserve Just Caved to Trump and its Glorious

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Donald Trump
Photo Courtesy of Gage Skidmore via Creative Commons License

The last two weeks have seen a bull market turn to a bear market in record time.

As a way to offset the purge that is happening in the market, Trump has put pressure on the Federal Reserve to lower interest rates, and the Fed has finally responded.

Cutting Interest Rates

President Trump himself was shocked when he got the news on Sunday that the Fed had cut rates to zero.

Fed Chairman Jerome Powell stated, “The actions we have announced today will help American families and businesses, and indeed, our entire economy weather this difficult period and will foster a more vigorous return to normal once the disruptions from the coronavirus abate.”

While the market did not necessarily respond to this positively on Monday, other circumstances contributed to the continued sell-off in the market.

Panic Selling and the Economy

One of the reasons the panic selling started on Monday was because President Trump stated the “crisis” could extend through July or August.

This was, as usual, widely misreported by the media.

The full context of the statement was that we can expect the curve itself to continue through July or August until we start to see a significant decline.

This would be the normal course of the virus.

By no means did the President say the entire country would be shut down until July or August.

The measures currently being taken are to ensure the curve remains low and consistent rather than shooting straight up through the roof.

Dr. Fauci has stated numerous times that the normal course of these viruses decline as the weather gets warmer.

So, even if there is no treatment by then, which there should be, the warmer weather will impact the spread of the disease.

Having said that, everyone is still encouraged to be prudent when it comes to social contact and gatherings.

Continue to follow the guidelines and practice good hygiene and cleaning recommendations.

This will pass, and everyone needs to dial down the panic to ensure we come out on the other side of this in good shape.

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