Fed brought out the big guns to save market but it wasn’t enough, ex-insider tells Boom Bust
“If the Fed had been silent then we might have even seen more disruption,” Danielle DiMartino Booth said in an interview with RT’s Boom Bust. “Sadly, they’ve backed themselves into a corner and they had to deploy all of the weapons that they had, all at once, and that still wasn’t quite enough.”
The analyst noted that the average American will hardly feel any impact of the rate reduction and fresh quantitative easing, as those tools were not designed to help those people who are about to be displaced or lose much of their income.
“We are still waiting for the next shoe to fall, with concerns that next shoe is going to be in the credit markets, not necessarily the stock market,” she said. While it is still hard to say where the credit crisis is going to come from, $10 trillion dollars in the corporate debt market may hide a “potential sleeping giant” that could cause disruption, she believes.
The measures to contain the spread of coronavirus may even lead to a technical recession, as nationwide social distancing is set to disrupt services on which the US economy is dependent.Also on rt.com Dow plunges 3,000 points in biggest single-day drop
“Social distancing in order to get the virus under control – that is going to put the economy into a technical recession and do so very quickly,” Danielle DiMartino Booth said, adding that now everything depends on how the US authorities help average citizens go through this crisis.
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