Over the past weekend, in an effort to inject a boost to an already fragile economy and stock market, the Federal Reserve dropped interest rates down to zero percent.
It was a demand that President Donald Trump had frequently made of the Fed for several months. In recent weeks, Trump also implied that the move would help stave off more drops in the stock market, as the world grapples with the economic fallout from the coronavirus pandemic.
Yet in spite of that move and others like it, Wall Street took a tremendous tumble on Monday morning.
The Dow Jones Industrial Average opened at more than 2,250 points below its close on Friday afternoon, a drop of nearly 10 percent overall. The S&P 500 fell by 8.14 percent, which triggered a delay in trading altogether on Wall Street for 15 minutes.
— ABC News (@ABC) March 16, 2020
It seems, in spite of its best intentions, the Fed rate drop didn’t do much good at all to halt the continued drop in the markets.
Most of the gains in the market seen since Trump became president have been erased since the middle of February. The DJIA hasn’t been this low since April of 2017, just a few months into the president’s term in office.
Put another way, at the highest point the Dow had reached in February, it represented a gain in that market indicator of about 48 percent since Trump took office. But after all the losses it has incurred, those gains have been cut down to just 5.5 percent.
Trump has tried to maintain a positive outlook on the markets even as losses continued to accumulate. Just four days ago, he had said, “the markets are going to be just fine, just fine.”
Trump says ‘the markets are going to be just fine.’ This has been the worst week for the markets since the 2008 financial crisis pic.twitter.com/eo0FUEs7u7
— NowThis (@nowthisnews) March 16, 2020
When asked by a reporter how he could say that when markets were “tanking” that very same day, Trump ignored the follow-up question.
Chris Walker is a freelance journalist based in Madison, Wisconsin, who focuses on news, politics, and analysis of world events. A graduate of the University of Wisconsin-Milwaukee, since 2005 Chris has reported on workers’ rights protests in Wisconsin, opined on four separate presidential elections and written on a number of other political subjects for a variety of national online publications.