FT News Briefing Fed predicts no rate increase until 2022, Brazil vs Covid-19, Bumper CEO stock awards
Jun 11, 2020
Discover why the Federal Reserve plans to keep interest rates near zero through 2022 amidst economic upheaval. Delve into Brazil's struggles against the COVID-19 pandemic and the impact on its economy and small businesses. Examine the paradox of CEOs taking temporary pay cuts while still receiving hefty stock options that could overshadow their sacrifices. The conversation highlights corporate governance and public perceptions of executive compensation during these challenging times.
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Slow U.S. Recovery Predicted
- The Federal Reserve predicts a slow U.S. economic recovery, with unemployment near 10% by year-end.
- They project a 6.5% contraction in the U.S. economy this year, keeping interest rates near zero until at least 2022.
Market's Muted Reaction
- The market's muted reaction to the Fed's announcement suggests their dovish stance was already anticipated.
- Investors were looking for any shift away from the Fed's accommodative position, but Chair Powell reaffirmed their commitment to low rates.
Brazil's Compounded Crisis
- Brazil faces a compounded crisis: political, economic, and a severe health crisis due to COVID-19.
- The country's daily death toll from the virus has surpassed that of the U.S., yet President Bolsonaro opposes lockdowns and social distancing.