The Us central bank (the FED) has taken steps to bring the U.s. economy to be stimulated. This week, the FED announced the second time, billions of dollars in the bank world, rate. It is also reduced the interest rate by 25 basis points or a 0.25 of a percentage point, and will vary between 1.75 and 2 per cent.
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FED and ECB are doing the same thing
On the 31st of July, we informed you that, for the first time in the ten-year anniversary of bitcoin, Us FEDERAL reserve, the interest rates have been reduced. Less than two months later, and we will be able to get a similar message. The FEDERAL reserve, the interest rate is again reduced, an aggressive move that is similar to that of the ECB (European Central Bank).
A lot of analysts are expecting that by the end of the year, the FED announced that the interest rate is still further reduced. That seems to be the head of the FEDERAL reserve, and Jerome H. Powell, has to say:
There may be a time will come when the economy is weak and we are more aggressive to cut down. We don’t know. We are going to be the things to look at, we look at the data and the developing situation.
He is not happy
The American president, He wants to be the more extreme measures, including a further reduction in which the rate of interest becomes negative. Here we are, in Europe, of course, well known to me. The ECB has already had a negative rate of interest. And almost nobody in the Netherlands is very pleased about.
The European Central Bank, is acting quickly, Cuts Rates by 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar-‘re hurting U.s. exports…. And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!
— Donald J. Trump (@realDonaldTrump) September 12, 2019 at the latest
Even after the FED announced that the interest rate has been lowered, and has promised to be 128 billion into the financial system, globally, is He unhappy.
Jay Powell, and the Federal Reserve to Cut Again. No guts, no sense, no vision! A terrible communicator!
— Donald J. Trump (@realDonaldTrump) September 18, 2019 at the latest
Night loans
About 128 billion u.s. dollars, which is intended to be the interest rate that banks give each other to rely on between 2 and 2.25 percent. This is going to be short-term loans that will usually take no more than one day, be repaid to it. The rate of interest on these loans amounted to 10 percent and the FED provides, this flow of money, then coming to a standstill. Due to the billions of dollars to spend, want to keep those interest rates low. In English, this is the overnight lending market to be called.
Every night, check out the banks if they don’t have enough money to provide a guarantee for the bonds. If it does not, then, lend them to other banks. A lot of banks have had the last few nights and don’t have enough of each other, borrowing more and more and more expensive as it was. If you want to know more about then the twitterthread to follow.
Okay, for everyone who is confused: Here’s a quick-and-dirty explainer, a thread on the overnight lending market, and that the Federal Reserve has just bailed out.
— Heidi N. Moore (@moorehn) – September 18, 2019 at the latest
The total market capitalization of bitcoin
The central bank has all the financial injections to their reserves this year to see a decline of 171 billion us dollars. That’s almost twice as much as the entire market cap of bitcoin. That is, at the moment of the 177 billion dollars (160 billion dollars). It was higher, but the stock price crashed last night, and within a couple of hours with a four per cent interest.
According to The Street, and the U.s. budget deficit for this year, for the second time to $ 1 billion. It seems as if America and the rest of the world is in a vicious circle of lending money and interest rate cuts to bring the economy to stimulate it and to get other countries to have a heel turn. A lot of analysts are expecting a repeat of the financial crisis of 2008 are inevitable.
This is a chance for bitcoin to get to see how many of these computer shows it as a safe haven in order to save it.