Dear reader: There will be no Wall Street Breakfast on Thursday. We return on Friday. Federal Reserve and other central banks announce reductions in policy interest rates. The Fed cut its key lending rate by 50 BPs to 1.5%. In a coordinated effort, ECB and Bank of England each drop their key rates by 0.5%, to 3.75% and 4.5% respectively. "Throughout the current financial crisis, central banks have engaged in continuous close consultation and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets. Inflationary pressures have started to moderate in a number of countries, partly reflecting a marked decline in energy and other commodity prices. Inflation expectations are diminishing and remain anchored to price stability. The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability. Some easing of global monetary conditions is therefore warranted." Down, down and down. U.S. markets plunged more than 5% Tuesday, their fifth straight day in the red, completely unmoved by a new Fed apparatus to buy commerical paper (secured and unsecured) and a Bernanke hint at lower interest rates. The Dow's five-day drop of 13% is its worst since post 9/11. The S&P 500 closed below 1,000 for the first time since Sept. 2004, and its five-day drop of 14.6% is the biggest since Oct. 1987. Based ...
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Dear reader: There will be no Wall Street Breakfast on Thursday. We return on Friday. Federal Reserve and other central banks announce reductions in policy interest rates. The Fed cut its key lending rate by 50 BPs to 1.5%. In a coordinated effort, ECB and Bank of England each drop their key rates by 0.5%, to 3.75% and 4.5% respectively. "Throughout the current financial crisis, central banks have engaged in continuous close consultation and have cooperated in unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets. Inflationary pressures have started to moderate in a number of countries, partly reflecting a marked decline in energy and other commodity prices. Inflation expectations are diminishing and remain anchored to price stability. The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability. Some easing of global monetary conditions is therefore warranted." Down, down and down. U.S. markets plunged more than 5% Tuesday, their fifth straight day in the red, completely unmoved by a new Fed apparatus to buy commerical paper (secured and unsecured) and a Bernanke hint at lower interest rates. The Dow's five-day drop of 13% is its worst since post 9/11. The S&P 500 closed below 1,000 for the first time since Sept. 2004, and its five-day drop of 14.6% is the biggest since Oct. 1987. Based ...