Well that didn't take long. After the Feds actions late last week with Not QE4 continued injections via the repo markets. The Fed in anticipation of helping the markets start off well on Monday, the Fed has created the YES this is QE5 package. What has been released:
- Interest now 0-0.25% cut from 1.00-1.25
- At least $500B in treasure purchases and $200B in MBS
- Boosting intraday liqudity
- Reserve requirements cut to zero
- Swap lines with coordination with other world Central Banks (Canada, Japan, EU, Fed & Swiss)
And how is this gift to the market received? S&P futures down -5% limit already.
FX Stratgist Virja Patel sums it up best
The Fed has thrown a kitchen sink of policy measures that should in theory weaken the US dollar. Problem is the global backdrop due to Covid-19 isn't conducive to putting money to work in other countries/FX. Fed making US risky assets relatively more attractive may support $USD