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A comment on Fed cuts half point in emergency move amid spreading virus. Parent comment

Re:Fed cuts half point in emergency move amid spreading virus by ajross on Tuesday March 03, 2020 @10:57AM (#22475556)
It won't fix any of those, but it will smooth the impact of 1, 2, and 4 over a longer period, which has value. And it absolutely does treat 3 directly, though obviously there is a balance sheet problem with insurers (not the same thing as a liquidity problem!) that will need to be treated by some kind of a bailout eventually.

People are being too rigid here: this isn't a perfect policy but it's not an inherently bad idea. You use monentary policy to buffer shocks to the economy, and in that regime it's best used early and with agility. I think the Fed is fine here, though I agree that this is a very minor side plot in a much larger story.

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Re:Fed cuts half point in emergency move amid spreading virus by throwaway5752 on Tuesday March 03, 2020 @11:16AM (#22475779)
Yeah, I didn't want to seem alarmist and talk about solvency crises in the insurance market. But I would be interested what impact this might have on life/health/related reinsurers. I feel like targeted intervention in that sector similar to the auto manufacturers is a better thing to plan for and I'm not sure that a 50 basis point cut is going to help as much as you do in 1/2/4 and will be insufficient in 3.

One thing that bothers me and I don't see discussed here is how much the market moved ahead of the announcement. It is very alarming that this sort of information leaked ahead of the announcement as much as it did. I would be interested to know how that reached the market.

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