Just announced by the Federal Reserve:

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1?1/4 percent. The Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

The move should come as no surprise to UrbanSurvival and  Peoplenomics readers.  As I wrote in the Monday column:

“What little happy-talk there is today suggests that the US Federal Reserve is willing to lower interest rates at their upcoming meeting (March 19-20).  Personally, I rather expect they will move sooner than later.  My reasoning is that a sudden rate reduction (like this week) would have more impact than a reduction that is already baked-in-the-cake by incessant headlines and rewrites of the coming event.

Sidebar: If I were running the Fed models, that’s how I’d play it.  Admitting, however, that there is longer-term risk.  In that the Fed will not have lower rates as a response when we get to (my expected much lower) market levels.  Maybe COVID will rid us of central bankers and we can return to Congress managing money?”

No, we’re not running anything as complicated as the Fed’s Dynamic Stochastic General Equilibrium model, described here.  But, when the NY Fed dumped in $120 billion in repo’s this morning, buying the dip was day-trader candy.  This should launch wave 3 up in the bounce with the next problem being the overhead resistance in our analysis earlier in the day.