Blitzkrieg on Interest Rates as US, ECB, Sweden, Switzerland, China, UK Cut Rates

In what is likely an unprecedented step today, major central banks across the world cut interest rates in what was a concerted effort.

The United States, Bank of England, European Central Bank (ECB) cut rates by 0.5% each. The benchmark rates for each country are now as follows:

• United States - 1.5%
• ECB - 3.75%
• Canada - 2.5%
• UK - 4.5%
• Sweden - 4.25%
• China - 6.93%

China also took the step of lowering rates for the second time in three weeks by knocking its 1-year lending rate down by 27 basis points (0.27%).

Other central banks in Canada, Sweden, and Switzerland also followed by cutting rates by 50 basis points (0.5%) as well.

In theory these rate cuts should translate into lower lending costs for borrowers, but in today’s climate where lenders are even concerned about the viability of other banks and reluctant to even loan money inter-bank, it is unclear how long it will take for the rates to reach borrowers.

Nevertheless, it should begin to have an impact on the financial system.

Similar Posts:

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• Bill Gross Says U.S. Understates Inflation
• Short Term Rates Down, Long Term Rates Up, Economy Down
• Bank of England Indicates Britain Headed into Recession
• Treasury Yields Create Defeasance and Yield Maintenance Nightmare

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