Fed, Five Central Banks Cut Dollar Swap Rate
By Scott Lanman and Jeff BlackSix central banks led by the Federal Reserve lowered the cost of emergency dollar funding for financial companies in a global effort to ease Europe’s sovereign-debt crisis.
The new interest rate is the dollar overnight index swap rate plus 50 basis points, a half percentage-point cut, and the program was extended by six months to Feb. 1, 2013, the Fed said today in a statement in Washington. The Fed coordinated the move with the European Central Bank as well as the Bank of Canada,Bank of England, Bank of Japan, and Swiss National Bank. (SNBN)
U.S. and European stocks rallied on the move aimed at easing strains in markets and boosting central banks’ capacity to support the global financial system.
Comment: The actions of the central bankers over the past decades have made the financial market grow into the monster that it is now. Now, the beast demands its daily feed at ever growing portions. I hear the animal grunt with satisfaction, yet I guarantee it won't be long when its hunger comes back again and when it gets wild and angry again should the bankers hesitate to give it its next feed in time.