‘A mixed message for the market’: What Wall Street is saying about the Fed’s decision to slash rates to near zero

AP Photo/Lee Jin-man

“The Fed started to shrink its portfolio in late 2017 but was forced to abandon that effort in mid 2019 amid rising risks to the economy. Taking back the current policy injection should prove difficult in the future. Yet even more QE seems to be the response. The Fed remains under pressure to support markets, the economy and financial markets.”  -Stephen Gallagher, chief US economist at Société Générale

“Well, if this doesn’t work, the Fed will presumably do even more QE, provide more explicit forward guidance, and perhaps experiment with target credit measures and the like. I find it hard to believe that any of those measures … will work if today’s actions don’t, however.” -Eric Winograd, senior vice president and US economist at AllianceBernstein