This is the big question of the day.
As you know, the US Fed today established a target range for the federal funds rate of 0 to 0.25%, effectively cutting its key rate for overnight lending to banks by between 0.75% and 1%.
This is the kind of event that history books (ebooks) will be writing about 100 years from now. I’m not going to bother reporting on it, as you can find a great write-up here and here.
Rather, I’d like to provide some meaningful insight from some of the world’s brightest financial minds. Apart from my own 🙂 I’ll continue to update this post throughout the next 24 hours as I scan great bloggers and writers, so make sure to keep checking back.
Mohamed El-Erian, Co-CEO & Co-CIO of PIMCO
Mohamed El-Erian, Co-CEO & Co-CIO of PIMCO was on CNBC today (Fast Money) and, amongst other things, he stated as follows:
Why is this different from Japan? The Fed is acting earlier and more aggressive than Japan’s central bank. In addition, US banks have taken write-downs far earlier than Japanese banks. Nonetheless, he says we still have to be careful about unintended consequences.
….more to come