They did it: The first emergency interest rate cut since 2008

The initial reaction from US stocks was a 700 point swing from red into the green, followed by a kneejerk decline, and then another bounce. It’s pointless worrying about the play-by-play from here because the software swinging these markets up and down intraday is even more powerful than the mass of human emotion that used to control things. There doesn’t have to be a rhyme or reason for every lurch and lunge lower or higher.

One thing I feel pretty confident about – not one Fortune 500 company is reinstating employee and executive travel because of an interest rate cut. Not one vacationer is booking a new, unplanned trip because of this. Not one additional meal will be eaten in a restaurant. Not one school or office building that would otherwise be shuttered as a precaution is going to be held open. A change to the Fed Funds overnight lending rate can’t affect epidemiology or biology.

The fact that central bankers are paying attention and keeping liquidity intact is not a negative, it’s fine. Potentially, it can keep people calm about business conditions. Okay. I just don’t think it changes what’s going to happen with the potential virus spread and concomitant scary headlines.