For 10 days, while the markets were cratering as if they themselves had contracted a very serious case of coronavirus, Fed officials made all of their Fed-y reassuring mouth sounds: We’re keeping an eye on things, we’ll do something if it’s warranted, but it’s not yet, so just calm down. And then the markets did, soaring yesterday and continuing that rise today. At least until, after watching everyone else—including the White House, which although it wants to make clear thinks this whole China-virus or whatever things is totally overblown and invented like climate change to hurt the Dear Leader, did think that Jay Powell & co. were doing their typically horrible job containing a thing that Larry Kudlow said was already contained and oh yea doesn’t exist anyway—overreact for a week and a half, the Fed decided it would like to go a little nuts itself.

The Federal Reserve cut its benchmark rate by a half percentage point on Tuesday morning, delivering a booster shot to stem potential economic disruptions from the spreading coronavirus epidemic with its first between-meeting move since the financial crisis…. Fed Chairman Jerome Powell at a press conference following the rate cut said the central bank “judged that the risks to the U.S. outlook have changed materially” and that the Fed “can and will do our part, however, to keep the U.S. economy strong as we meet this challenge.”

Well, if Powell’s goal was to get the panic-selling on Wall Street to resume, he did his usual heckuva job.

Stocks initially shot higher, propelling the Dow Jones Industrial Average up more than 300 points. But within 15 minutes, stocks’ initial gains gave way to jerky up-and-down trading action—with the blue-chip average and Treasury yields falling to session lows after Fed Chair Jerome Powell acknowledged the limits of the central bank’s actions in a press conference…. The Dow fell 510 points, or 1.9%, to 26194, while the S&P 500 and Nasdaq Composite were down 1.7% and 1.6%, respectively. The yield on the 10-year U.S. Treasury note, a benchmark for everything from mortgage rates to student loans, slipped to 1.036%.

And if he expected some relief or gratitude from the toddler-bully-in-chief, well, shouldn’t he fucking know better by now?

Federal Reserve Cuts Rates by Half Percentage Point to Combat Virus Fear [WSJ]
Stocks Drop Despite Surprise Fed Rate Cut [WSJ]
Trump slams Fed as ‘slow to act’ as coronavirus threatens US economy [BI]

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