Rolling coverage of the latest economic and financial news, as central bankers and finance chiefs face the prospect of an economic slowdown
- Latest: Finance ministers and central bankers issue joint statement
- No action today, but fiscal moves could follow
- Mark Carney says Bank is preparing for coronavirus shock
- Australia cuts rates — Trump demands Fed action
- Last night, the Dow surged by 5%
Jennifer McKeown of Capital Economics says today’s G7 statement “falls short of hopes of a coordinated policy response.”
It raises the risk that central banks will disappoint markets’ expectations in the months ahead, she cautions, telling clients:
This is a disappointment compared to previous hopes of an immediate and coordinated fiscal package and interest rate cuts, although such hopes had already been dampened by information leaked from “G7 officials” early this morning.
The G7 appears to have disappointed the markets.
Wall Street is currently expected to open lower, after posting its strongest jump in five years on Monday.
S&P 500 futures turned negative and Dow futures lost 390 points following the statement.And there are limits to what central banks can do in the current environment. Their policy arsenal is already depleted after years of low interest rates and bond-buying programs.