The Fed is stepping up its support, a common response in Europe

La Fed intensifie son soutien, réponse commune en Europe

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The Fed on Thursday announced a new lending envelope of 2300 billion in support to businesses.

The magnitude of the economic shock caused by the COVID-19 calls for repeated interventions of the monetary authorities, and budgetary, to shots of thousands of billion. The federal Reserve has added Thursday, massively, as in Europe, the Finance ministers of the 27 were to join behind a replica that is common to the pandemic.

In a speech expected, the federal Reserve chairman, Jerome Powell, has stressed that the central bank added to its arsenal a lending envelope of 2300 billion in support to businesses, local communities and States. These funds “will provide assistance to households and to employers of all sizes and give local and regional authorities the means to provide crucial assistance in these times of pandemic,” wrote the Fed in a press release. The unemployment rate rises “at an alarming rate, “albeit” temporary, “said Jerome Powell, who adds, however, have” every reason to believe “that the economic recovery” will be strong ” in the United States, once the crisis has passed. For their part, the members of the monetary committee had argued at their last meeting that the negative effects could be less sustainable than those that had followed the financial crisis of 2008.

The federal Reserve seeks to “ensure that the recovery will be as robust as possible when it will come,” she said Jerome Powell.

This presentation came to mitigate the effects of the grim statistics indicating that 6.6 million of new applicants for unemployment benefits were added during the week of 29 march to 4 April, after the record high of 6.8 million last week. In total, in three weeks, 16.7 million american workers have made a demand, the equivalent of 10 % of the active population in the United States. A number of victims of the pandemic that could double, according to the forecasts of the firm’s research, Oxford Economics

In Canada, job losses as measured by Statistics Canada amounted to more than a million in march, a prelude to a further deterioration anticipated for April.

Agreement in the Eurogroup

On the other side of the Atlantic, the Finance ministers of the Eurogroup reached an agreement on a response to common economic response to the crisis after several meetings unsuccessful, finding a common ground with the netherlands, until then a rather uncompromising.

This consensus is a relief for the Europeans, who manage to display a unit in the face of the economic consequences disastrous of the virus, after weeks of procrastination, highlighting a gaping fracture between the countries of the North and those in the South.

In the Face of the pandemic, the european response should focus on three main axes : up to 240 billion euros of loans from the rescue fund of the euro area, a guarantee funds of 200 billion euros for companies and up to $ 100 billion to support the part-time unemployment. The burning question of ” coronabonds “, designed to support the economy in the long term after the crisis, considered as less urgent, was not decided Thursday.

Good week for stock market

The Stock market, investors have put an end to a week shortened by the Easter holiday, pushing the benchmark indices higher. The Dow Jones rose 1.2 %, to 23 719,37 points, the Nasdaq gained 0.8 % and the S&P 500 rose 1.5 %, to 2789,82 points. Throughout the week, the Dow Jones has climbed 11.3 %, the Nasdaq up 10.6 % and the S&P 500 of 12.1 %, the benchmark index on Wall Street registering its highest weekly gain since 1974, it stand out.

For its part, the VIX index, the so-called fear, continued its slide to constitute 41.67 per points on Thursday, down 3.9% or $ 1.68 point on the session. This index of the volatility of the S&P 500 has hit a peak in the crisis of 82,69 points on march 16.

In Toronto, the S&P/TSX has gained 240,92 points to finish the session with 14 166,63 points.

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