Federal Reserve hits panic button
Stock market futures trading halted after 5% drop
San José, CA – On Sunday, March 15, the Federal Reserve bank hit the panic button, dropping interest rates by a full percentage point to near zero. The last time that Fed did this was in December 2008 during the financial crisis. The Federal Reserve also pledged to restart the Quantitative Easing or QE program of longer-term bond buying, first started in November 2008. Trump’s Secretary of the Treasury Mnuchin also vowed to go to congress this coming week to restart emergency financial powers for the federal government in addition to the Fed’s actions.
The stock market did not react well, seeing it as a confession that Trump’s promises for economic action and the weak bipartisan economic package going to the Senate this week were not enough to keep the economy from shutting down. The Standard & Poor 500 (the broadest of the major stock indices) saw its futures fall 5% and trading was halted. The last time this happened a week ago, trading had to be halted on Monday as the stock market fell 7%, to start a week of wild downs and ups.