Overseas Headlines – April 24, 2020

United States: 

Fed’s Near-Zero Rates to Last into 2023, Economists Predict

“The Federal Reserve may hold interest rates near zero for three or more years, and its balance sheet will soar above $10 trillion as policymakers seek to revive the U.S. economy from recession, economists said in a Bloomberg survey. Just over half the 31 respondents to an April 20-23 poll predicted the target range for the federal funds rate, now at 0-0.25%, won’t move up until at least 2023. Another 22% said not before 2022.”




Germany Braces for Worst Economic Slump in Its Post-War History

“Germany expects the fallout from coronavirus to lead to the worst economic contraction since the country began its recovery in the aftermath of World War II. Gross domestic product is forecast to shrink by 6.3% in 2020, a deeper plunge than even during the financial crisis a decade ago, Handelsblatt reported citing Economy Ministry projections due to be presented next week. The low point of the recession — the worst since at least 1950 — is expected in April, before a gradual stabilization, according to the daily newspaper.”




China Cuts Another Policy Rate, Replaces Some Maturing Loans

“China’s central bank rolled over some of the targeted funds due Friday while cutting interest rates on the loans, the latest in a string of measures aimed at ensuring sufficient liquidity. The People’s Bank of China injected 56.1 billion yuan ($7.9 billion) into the banking system via the targeted medium-term facility, just as 267.4 billion yuan of the debt comes due. The one-year funding was offered at an interest rate of 2.95%, lowered from the 3.15% of the last operation in January. Analysts had expected a cut after the central bank lowered rates on some of its other policy tools to all-time lows.”



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