Above the Fold

How Australia Could Help Dictate Our Monetary Policy

It’s been 70 years since the Federal Reserve (Fed) has utilized its latest potential rate control tool. In 1951, the Fed instituted a cap on Treasury yields in order to wind down a stimulus program put in place during World War II. This policy, along with several other factors, helped lead the country to a boom that grew the economy around 37% from 1950 to 1960 with relatively low inflation overall — and that strategy could be returning.

America is a much different landscape today, but the Fed is looking at ways to further control rates and stimulate the economy beyond simply stating so. To that end, Fed officials are reportedly exploring a firm commitment to purchase as many securities as needed to effectively “peg” or cap yields for a certain period. The U.S. central bank is closely watching the actions of Australia’s central bank, which set a rate target of 0.25% back in March and has kept it there without the need to purchase significant assets. Experts believe that constant assurance of Fed participation may be enough to stem interest rate spikes, but obviously, the execution of this strategy will be highly nuanced. 

Three Things 

1. Tech, Digital “Exchanging” Wins for IPOs – With 44 new public offerings worth $12.2 billion, the tech-heavy Nasdaq is outpacing its more traditional New York Stock Exchange rival, which has logged only 27 deals at just under $11 billion. Aside from its more virtual presence, the Nasdaq is also generally cheaper to list on with annual fees capped at $159,000, while the NYSE’s can cost up to $500,000.
2. Want to Track Protests, Gatherings, Police and Crime? There’s an App for That – Startup sp0n Inc. has created a new app called Citizen, which uses a multitude of sources, including police scanners, users’ location data, images, videos and messaging to display live updates for protests, crime, police movement and more with high accuracy. According to The Wall Street Journal, the app had more than 620,000 new downloads in the last week and is available in 18 major U.S. cities.  
3. Why More Bank Branches May Be Closing – Aside from the financial hardships that many Americans and businesses are facing, the pandemic has forced many to bank virtually using apps, websites or call centers. According to financial research firm Novantas, branch traffic fell more than 30% in the last seven weeks compared to last year. In an effort to cut more costs, banks now have more reason to expedite planned closures and reduce even more as consumers’ virtual interactions increase. 

Did You Know?

The Latest (Fact-Checked) COVID-19 Positives

• New York City began reopening its economy on a larger scale yesterday. The first phase includes about 16,000 nonessential retail businesses and 3,700 manufacturing companies in the areas of construction, agriculture, manufacturing and wholesale trade.
• A new study found that the novel coronavirus has become less-lethal over the last few months. Scientists believe that knowledge, treatment options and a less-panicked approach are all leading to improved outcomes. At this point, it has not been confirmed that virus mutations are less deadly.