Despite five interest rate cuts in the past six months, Wall Street has remained impervious to the Federal Reserve's wooing, with investors taking a "thanks, but..." attitude to Ben Bernanke & Co.'s attempt to recharge the economy and stock market.
Since September, the central bank has lowered its federal funds rate, a key overnight bank lending rate, to 3% from 5.25%. This included a 75 basis point emergency cut in January. There are 100 basis points in one percentage point.
Federal Reserve policy-makers will meet again on March 18 and are expected to cut rates by at least another 50 basis points, to 2.5%. Coincidentally, the Fed's next meeting also marks the six-month anniversary of the first cut in this easing cycle...
Since the first rate cut on Sept. 18 of last year, through Monday's close, the S&P 500 is down 16.2%. That makes this the worst performance for the market following a series of rate cuts since the 1950s, according to Standard & Poor's research. And that's taking into account other times when the economy was in a recession, as may be the case now.
No comments:
Post a Comment