As Trends Journal subscribers know, for the past year, despite mainstream economic forecasts to the contrary, Gerald Celente had predicted U.S. interest rates would be at negative to zero by October 2020.
Now, in an emergency action to save crashing equities, on Sunday, the Fed cut its interest rate by 100 basis points, leaving the rate to float between zero and 0.25 percent.
Pumping more monetary methadone into the dying investor markets, the Fed also announced an additional $700 billion in “quantitative easing.”
The Fed will buy $500 billion in treasury securities and $200 billion in mortgage-backed instruments. It also struck a deal with five other central banks to keep charges low for currency swaps, by which institutions trade currencies of one country for another.
Pledging to keep the cheap money binge flowing, Fed chair Jerome Powell said, “We will maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals.”
In the bank’s announcement cutting rates, it stated it stands ready to use its “full range of tools to support the flow of credit to households and businesses.”
TREND FORECAST: As covered in previous issues of the Trends Journal, central banks have long run out of money-pumping tools to boost failing markets and economies. Their monetary methadone injections will not stop them from crashing.
