Powell, We Have A Problem: S&P Futures Tumble At Open; Gold, Treasuries Soars

The Fed may have a very big problem on its hands.

After firing the biggest emergency bazooka in Fed history, one which was meant to restore not just partial but full normalcy to asset and funding markets, Emini futures are tumbling over 3% at the start of trading – perhaps because the Fed has not only tipped its hand that something is very wrong, but that it can do nothing more to fix the underlying problem…

… while gold is surging over 3% following today’s dollar devastation as US Treasury futures soar, as it now appears that the Fed’s emergency rate cut to 0% coupled with a $700BN QE is seen as note enough by a market which is now openly freaking out that the Fed is out of ammo and has not done enough.

In short, as FX strategist Viraj Patel puts it, “the Fed has thrown a kitchen sink of policy measures that should in theory weaken the US dollar. Problem is the global backdrop due to Covid-19 isn’t conducive to putting money to work in other countries/FX. Fed making US risky assets relatively more attractive may support $USD”

The Fed has thrown a kitchen sink of policy measures that should in theory weaken the US dollar. Problem is the global backdrop due to Covid-19 isn’t conducive to putting money to work in other countries/FX. Fed making US risky assets relatively more attractive may support $USD pic.twitter.com/zqBLJ3e1dA

— Viraj Patel (@VPatelFX) March 15, 2020

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