Only four days into the second month of the year, the traders have already given up on the guidance of Fed that they are going to be on the sidelines in the year 2020 and has lined up the bets for a more than one interest rate cut in the United States. The Federal Reserve fund futures price shows that the outbreak of coronavirus has gone worse and the expectations have been rising about the Fed to take action like the policymakers had done in the previous year when the trade war had begun between the U.S. and China and had ravaged the trade and industries of transportation.
The most recent of the reports on the economy of United States may not have been exactly bullish as per the experts as they are pointing to the readings being weaker than expectations in the month of December and January on the inflation of consumer and producer and a mixed quarter 4 report of GDP. The data has not been huge as per the expert Jon Hill.
The IMF has credited the loose policies for the stabilization of the economy of the world in the previous year as the banks all over the world had in unison been cutting the rates however this is not going to work again. The Central Bank of Europe, the Bank of Japan as well as a lot of the central banks all over the world have been holding the negative rates of interest and have been pumping the tens of billions of dollars out in the stimulus every month. Central Bank stimulus might now be reaching to a point where they are ineffective and may even end up being counter-productive.
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