Key Points
- Fed sees interest rates staying near zero through 2022 1
- Fed projected an economic contraction of 6.5% in 2020 but bouncing back to a 5% gain in 2021. 1
- Unemployment claims totaled 1.5 million last week compared with the 1.6 million Dow Jones estimate and 355,000 fewer than the previous week.
- Wall Street grew more concerned about a second wave of coronavirus cases in the U.S 3
- Dow plunges 1,861.82 points, or 6.9%, to close at 25,128.17 on worries of second coronavirus wave
“We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates,” Fed Chairman Jerome Powell said. “What we’re thinking about is providing support for the economy. We think this is going to take some time.” 1
“While Powell did not commit to any new action at this time, his focus on downside risk and uncertainty reinforces the message that they will take further action, probably by September,” JPMorgan economists said. 2
The risk of more easing initially had the U.S. dollar under pressure, seeing it touch a three-month low on a basket of currencies at 95.714.2
“We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage,” Mnuchin told CNBC’s “Squawk on the Street.” 3
Texas has reported three consecutive days of record-breaking Covid-19 hospitalizations.
To be sure, former FDA Commissioner Scott Gottlieb said states such as Arizona and Texas “never really got rid of the first wave.” He added: “It’s not a second wave.”