Word Of The Day “Action”: Stimulus “Whatever It Takes” Bank Of England Style

As expected, the Bank of England cut interest rates today to 0.25% from 0.5%.

The move leaves the US as the only major player talking about rate hikes. But as we have seen, there’s far more Fed talk than Fed action.

If you are looking for “action”, a count shows the BoE used that word eight times today in its Monetary Policy Summary following today’s rate cut announcement.

The British pound fell 1.52% but the FTSE stock market loved the “action” as BoE Mark Carney said the central would take “whatever action is needed” to promote financial and price stability.

I cannot find the word “whatever” in the BoE statement, but the Telegraph used that precise phrase.

Bank of England Delivers Action

The Telegraph reports Pound plunges as Bank of England Cuts Interest Rates for First Time Since 2009.

Investigating the Pound’s Plunge

GBP-USD 2016-08-04A

The move lower today did not even take the pound to lows seen in the week following Brexit.

Today’s dip was more related to the additional actions by the BOE than the rate cut itself. The pound may very well be bottoming here.

FTSE vs. Brexit

FTSE vs. Brexit

Coordinated Counter-Action

BOE Counter-Action

Bonds rallied in the US today in possible reaction to the BOE stimulus actions. Party on dudes.

Mike “Mish” Shedlock

Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment ...

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Chee Hin Teh 8 years ago Member's comment

well written. Thanks for your sharing