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U.S. stocks were up strongly today on news that the central banks of the United States and China were likely to continue to provide cheap–and cheaper–liquidity to financial markets and economies.

In minutes of its January 29 Open Market Committee meeting released today, Federal Reserve officials characterized current interest rates as appropriate “for a time.” That let Wall Street continue to believe that the Fed will cut interest rates more than once in 2020. The Fed Funds futures market currently prices in 40 basis points of cuts by the end of December. That would require the Fed to cut twice in the remainder of 2020 or to decide on a rate cut larger than the usual 25 basis points cut that has characterized Fed moves. (It takes 100 basis points to make up 1 percentage point.)

In China the People’s Bank looks like its setting up a drop on Thursday in its benchmark interest rate on new corporate loans after the Chinese central bank cut other rates earlier this month. Expectations are now for a drop of 10 to 15 basis points in the loan prime rate–an indicator of the price that lenders charge clients for new loans. This would be the first cut in that rate since November 2019 and would follow on cuts of that same size in interest rates on short-term and one-year loans to commercial lenders earlier this month.

Expectations are for additional cuts to the loan price rate this year–with a consensus favoring a total cut of 25 basis points–and another drop in the reserve requirement ratio that will free up banks to lend more of their capital.