Buffalo, NY (WBEN/AP) The Federal Reserve announced a half percent cut in the interest rate, and investors responded Tuesday with a giveback of nearly 75 percent of Monday's gains.
Stocks had rallied briefly in the morning following the Fed's surprise move, but it took just 15 minutes for the gains to evaporate. While the cut helped raise confidence for some investors — and gave exactly what some had been calling for — Federal Reserve Chairman Jerome Powell acknowledged that the ultimate solution to the health crisis will come from health experts and others, not central banks.
Ogorek says the Fed doesn't have a lot of bullets left. "The 10 year rate went down less than one percent today. That means there isn't much more economic stimulus the Fed has," says Ogorek, and the other option, a government stimulus is unlikely. "Because the relations between the administration and Congress are so toxic, it's tough to see them getting together to do something for Americans and the economy because they're positioning themselves for the election," notes Ogorek.