The Bank of England has decided to lower the interest rate so that the coronavirus economy and its consequences can be better absorbed and adapted. The UK base rate is reduced to just 0.25%. Will pumping money help the price of Bitcoin?
Interest rate saves stocks, Bitcoin price keeps falling
In its official statement, the Bank of England has said that their motivation is to maintain asset prices:
“With the expansion of COVID-2019, asset and commodity prices have fallen sharply … Market uncertainty indicators have reached extreme levels.”
United Kingdom follows the monetary policy of the United States of America. The Fed has also decided to cut interest rates after criticizing of President Donald Trump. All US stock market indexes jumped in response to the easing.
London is trying to do the same trick. In response to the easing of the policy, all European indexes jumped and are traded in green numbers. The only exception is the Spanish one, which still claims losses.
Alex Krüger, a crypto-currency expert and macroeconomist, expects the European Central Bank to do the same thing on Thursday. Greater speculation revolves around the expectation of a reduction by the Fed in response to Trump’s further criticism.
BoE played ball. ECB coming up on Thursday. Then the Fed again the following Wednesday. https://t.co/rFU9d7XGp4— Alex (@classicmacro) March 11, 2020