The Fed panicked and short-term rates are ‘headed toward zero’
The Fed absolutely panicked in the face of the emerging coronavirus. But we were headed toward zero with or without the sickness spreading. The timeline may have just been moved up.
“If we look at history, once the Fed does a panic, intermeeting rate cut, particularly when it’s 50 basis points … they typically cut pretty quickly again,” Gundlach said. “I’m in the camp that the Fed is going to cut rates again, perhaps even in two weeks” during its regularly scheduled meeting.