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Fed, Central Banks Launch Coordinated Action

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  • Description

    FBN’s Diane Macedo breaks down the latest action by global central banks.

  • Duration 5:02
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This is the Imus in the morning program on the Fox Business Network.

Now here's -- and its morning everyone.

Leading developed countries announced actions to enhance their ability to provide liquidity supports the global financial system this morning.

But this is is Robert Gray joins us with more from the newsroom so Robert.

Among the think they've agreed to lower the cost of the existing dollar swap -- but fifty basis point what kind of impact is that expected to have.

Yeah well I suppose it's intended to -- assist these European of financial institutions -- what -- had difficulty accessing short term funding they typically have worked with the big money market mutual funds which you.

May look to -- so when did this safer instruments within your 401K -- plan.

And that's because they were looking for short term -- -- went dead then of course work with these particularly big French banks that they've been pulling back on that.

Throughout the year really over the past year or so.

And so that market has been drying up -- has been as sort of a loss of us source of funds if you -- of the European Central Bank will then be able to go to the Fed.

-- dollars through these swap lines at a much reduced got cut rate price if you will instead of charging them.

1% interest only tribes and one half of 1% to cutting it down 100 basis points to fifty basis points on the short term -- -- the ECB can then turn around and loan.

To -- European institutions who may be having trouble accessing dollars or maybe it just accessing funds in general right now all the swaps will be in dollars although.

They had this exceptional -- in the movement today move if you will.

Between -- 6 central banks does allow for bilateral so they could go between say euros and the British pound without they're going.

Through the Fed the Fed also very -- -- quick to point out here in this -- released this morning that US financial institutions currently.

Do not faced difficulty obtaining liquidity a short term funding markets -- this is not.

A liquidity issue for years the US institutions.

Looking primarily to assist those in Europe of course on -- these institutions big holders of the European sovereign debt much of which could be.

Defaulted upon or perhaps say they could be taking a big loss on those investments a lot of concern there whether reasons you've seen these money market mutual funds pulling back.

From investing there.

Throughout the year the Fed goes on to say they're prepared to use tools as needed to support financial stability and promoting the extension of threat to US households and businesses meaning there.

Looking to avoid a situation we saw back in 2008 -- of course when the short term.

Come commercial Paper market was drying up and many of the largest by US.

I institutions and businesses were having trouble do I get obtaining short term loans -- that market dried up as well dance so with that most of it back over -- -- -- -- we've been -- before thanks Robert.

Taking a look at the markets in the reaction to all of this and a lot of other knew that he got in this morning right now or thirty minutes.

Before the opening bell and futures were already -- to China's Central Bank cut the reserve ratio there.

For their banks by half of 1% but as you can imagine market -- even higher on this news from the Fed Dow futures are up to 82.

The S and -- of 36 the nasdaq's up 62.

In Europe we -- similar motion they really took off -- -- news is well they are up triple digits across the board there with Frankfurt up to 64.

As I mentioned we also got a lot of economic news this morning third quarter productivity came in at 2.3 percent.

That's slower than the expected increase of two point 6% and down from the first reading.

Of three point one labor costs came in at a decline of 2.5 percent.

And that was revised higher from the previous reading we also got news on the labor front according to.

ADP payroll processing firm 206000.

Jobs were added in the private sector this month.

The -- it was for 130000.

The outplacement firm challenger gray and Christmas also reported that employs announced plans to lay off.

42474.

People in November.

And remember it will get the big monthly employment report from the government on Friday now let's get the latest on weather for meteorologist Maria Molina and our Fox Business by the -- -- Maria.

Hey good morning vin an if you live in -- -- you -- out the door today it's gonna be a lot -- out there we did have a strong system moves in the region and behind it we're looking at temperatures much cooler 52 -- -- -- -- New York City 53 in Philadelphia.

And busting -- clearing things out you're gonna see that sunshine throughout this afternoon -- you will also had to deal with the windy conditions that we could be looking at some delays at the airport.

-- -- think those gusty winds in excess of thirty miles per hour at times Atlanta has still chilly out there 49 for -- high in the low forties for Chicago and Detroit.

There is a new storm system -- tracking out west is going to be producing widespread snow across the Rockies.

Generally light accumulations at the lower levels and of course -- storm system that's continuing to exit the northeast were moving to Canada behind it gusty winds and still some lingering snow showers Diana long interior portions.

Of the northeast.

I thanks -- taking a look at commodity they are following the trended in the Green oil is up -- 101.

Dollars a barrel.

Imus in the morning continues right now on Fox Business giving you the -- about.

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