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Monday, March 16, 2020

No US monetary and fiscal policy can save the US stock markets. - Part 3

http://sg-stock.blogspot.com/2020/03/no-us-monetary-and-fiscal-policy-can.html

We told you that the US would restart is QE and keep its interest rates low previously (See above).

Guess what!

https://sg.finance.yahoo.com/news/federal-reserve-cuts-rates-to-zero-restarts-quantitative-easing-qe-210001968.html

The US FED did another emergency rate cut yesterday because Trump threatened to demote Powell from FED Chairman to FED director and Powell caved in to Trump's threat for fear of his demotion.

http://sg-stock.blogspot.com/2020/03/the-us-markets-just-had-dead-cat-bounce.html

We told you that the recent rebound was a dead-cat bounce because the FED was pumping money into the wrong sector (Financial market).  The Asian markets are dropping again after the 2nd FED emergency cut.

The UK has just warned that this covid-19 outbreak will last 1 year and many Brits will get infected.  The US infection rate and death toll are still very low now and will need to rise significantly when there are more covid-19 testings.  The US has just started its free covid-19 testing programme but there is no free covid-19 treatment plan in place.  This won't entice its citizens to come out for testing.  The US must heed our advice to stop the chain of transmission.

The US FED has cut its rate to zero but I can tell you that no business owner will want to borrow free interest-rate loans when there are no customers.  This will be like japanification in the USA.  Japan's interest rates are in negative zone and inflation is still absent because there is not enough customer demand.

What is the FED going to do next when it has no ammunition left?  This is what worries the investors.




3 comments:

Eric Ho said...

https://sg.news.yahoo.com/govt-virus-testing-prioritize-medical-230946452.html

The US must expand its free covid testings for the general public soon.

Eric Ho said...

How long will it take for the US FED to learn the harsh truth that pumping free money into the financial system won't stop the bloodbath unless the virus is contained?

The US FED will create more serious financial problems when the rates are in the negative zone!

Eric Ho said...

https://sg.news.yahoo.com/coronavirus-uk-outbreak-could-see-002426645.html