BREAKDOWN: Can $700B in Quantitative Easing Calm the Markets? CoinDesk's Michael Casey and Noelle Acheson Discuss
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 16 March 2020
⏱️ 25 minutes
🧾️ Download transcript
Summary
Over the weekend, the Fed decided it couldn’t wait for Wednesday’s planned meeting to act, cutting interest rates to nearly 0%. It also announced $700 billion of direct capital injection through the purchase of Treasury securities and mortgage-backed debt.
The question is whether this action can actually calm markets? So far, it’s not looking great. Within minutes, emergency circuit breakers were triggered again. Markets are down more than 9% on the day.
In this episode, @NLW chats with CoinDesk’s Chief Content Officer Michael Casey and director of research Noelle Acheson about:
- Why the market isn’t impressed with Fed action
- Why no Fed response will be enough on its own to solve the health crisis and the resulting economic dislocation
- Why we’re going to see more conversations in the coming weeks about UBI, MMT and other direct citizen stimulus
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Transcript
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| 0:00.0 | Welcome back to the breakdown. An everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond with your host, NLW. |
| 0:15.0 | The breakdown is distributed by CoinDesk. All right, welcome back to the breakdown. |
| 0:23.4 | It is Monday, March 16th. |
| 0:25.6 | And today we're going to do something a little bit different. |
| 0:28.4 | A week ago, we woke up to tweets from the US president that this was just a bad flu, effectively. |
| 0:35.1 | A week later, we are seeing shutdowns across states and municipalities |
| 0:40.3 | around the country. We're seeing a massive ratcheting up of financial intervention. |
| 0:45.3 | And so to just help make sense of it, I have Michael Casey and Noel Atchison from Coindesk here |
| 0:50.6 | to talk through really everything that's been going on. And so where I think I want to start |
| 0:55.6 | is overnight the Fed took a much more significant and more dramatic action. So, Noel, |
| 1:01.7 | maybe if you could just kind of bring us up to speed with what is happening in terms of regulators |
| 1:07.6 | or policymakers' response to this crisis that we have? |
| 1:11.8 | Sure, and I'll start with what happened yesterday, |
| 1:14.6 | and the reason the markets are crashing so much today. |
| 1:17.2 | Yesterday, the Fed did the only thing it knows how to do, |
| 1:20.7 | but it did so in a way that ended up having the opposite effect of the desired outcome. |
| 1:26.0 | Yesterday, the Fed cut rates by a full point, and it announced |
| 1:30.5 | significant support for the markets in terms of liquidity, and also it made it cheaper and more |
| 1:35.5 | convenient for banks to borrow directly, et cetera, a bunch of measures that on the surface |
| 1:38.9 | make a lot of sense, but we have to look at the way in which it did it. The Fed does not normally break its |
| 1:45.2 | habit of its pre-scheduled meetings, but yesterday it made a very drastic announcement on a Sunday, |
| 1:51.7 | and if any of you are classics scholars, actually on the Iads of March, which may have some |
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