Yesterday the Fed dropped interest rates to zero. I knew this was coming, but I didn’t think it would happens so soon after a rate cut only a few weeks ago. You would think that this would make stocks go up. But, in the short term, the opposite is happening. Investors feel that the Fed is reacting to negative information that only they have access to. Well, it doesn’t take a finance wizard to see that this virus is going to have a huge impact on the US economy.
It won’t be long before we start seeing the unemployment numbers climb. The revenue lost by having no spectator sporting events and cancelled conventions is hard to imagine. America is an open society which will make this thing harder to contain. China on the other hand, is able to lock down a whole city when needed. The best thing that could happen at this point is if they announce a treatment or vaccine. Let’s pray that happens soon.