Ex-Fed Gov Warsh sees coordinated global central bank action soon in response to COVID-19

[mia]

Former Federal Reserve Governor Kevin Warsh said Friday he expects the Fed and other central banks around the world to act soon in response to the coronavirus outbreak.

Warsh, occasionally rumored to be a candidate for Fed chairman after Jerome Powell’s term expires, spoke Friday morning to CNBC’s “Squawk Box.” He recommended the Fed act as quickly as Sunday to assuage financial markets that have been in an aggressive swoon all week as the virus has spread.

“This thing’s moving pretty darn quickly,” he said. “At the very least, a statement on Sunday night before Asian markets open would buy them a little time and let us all learn a little bit more about where things are.”

He said the Fed doesn’t have a lot of ammunition to help markets and the economy, so it needs to act quickly in a coordinated fashion with other central banks like the European Central Bank, the Bank of England, the People’s Bank of China and the Bank of Japan....

https://www.cnbc.com/2020/02/28/ex-fed-governor-warsh-sees-coordinated-global-central-bank-action-soon-in-response-to-coronavirus.html

[Squinch]

1. Like what? The US Fed already used up most of it's economy-boosting tools during the good times

in order to make Filthy Donnie look good.

Now a bad time has come and there's little they have left to work with.

[Farmer-Rick]

2. Oh to hell with rate cuts.....

They should just hand out $10,000 bills to every filthy rich criminal. Much more direct. It will go right into their pockets and make them unafraid of the virus....right?

But exactly how are rate cuts going to stop the virus? That's what the markets want to know. How is America going to help stop the virus....so far Trump shrugs and says, "I don't know and I'm really not worried about everyone getting sick."

We just have to pray for a miracle.

[Mike 03]

3. Heard a discussion about rate cuts last night

and some experts were saying they didn't understand the rationale for rate cuts at this time, as they won't stimulate consumption. Nothing can stimulate consumption when people are afraid, and others are prohibited from working. What companies will be taking out loans? For what conceivable purpose? Both supply and demand are impacted.

It also seems to me like this will drastically impact disposable income available to fixed income investors as interest rates plummet to near comic levels. In my mind at least, more rate cuts will decrease, not increase, spending.