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2020/03/05 / Erste Group Research

Fed cuts federal funds rate by 0.5%

The US central bank was the first one to react to the further spread of SARS-COV-2 this week by announcing a surprise inter-meeting rate cut of 0.5%.

The ‘risk shock wave’ of earnings warnings from the global manufacturing sector is increasingly spilling over into the services sector, which hitherto underpinned economic activity.

Flight to safe haven assets has led to markedly stronger risk differentiation.

According to the WHO, early, aggressive containment measures continue to represent the most effective protection.
Relative to the most recent revisions of economic and earnings growth rates, the market reaction to the corona virus appears excessive from today's perspective.

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General information

AuthorErste Group Research
Date2020/03/05
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria, Eurozone
Currency in focusEuro
Sector in focus-
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