Maslennikov spoke about the detrimental effect of the situation with coronavirus on the international economy.
“This is a natural reaction to the situation that has been happening all last week with financial markets. When data appeared on coronavirus infected in Italy and the USA ... American exchanges have essentially failed. Losses in reducing the value of assets per day amounted to about $ 3.5 million. Already on Friday it covered other markets, and the index in which the main shares of international companies were “protected” dipped by 10 percentage points, and the markets lost $ 5 trillion per day. Naturally, this required the Fed’s reaction, ”Maslennikov said.
The expert noted that this decision may be temporary and valid until markets stabilize due to the spread of coronavirus.
“American sites in the week, for six trading sessions, lost 12%. According to historical experience of this kind of exchange corrections, if there is a fall to 20%, then the next resistance level is 40-50%, that is, the market loses exactly half. If the market loses half, then a recession begins in the country's economy. Historical experience served to make this decision. In my opinion, it is not indisputable, but now it will allow stabilizing the market situation for a while until it becomes known that the peak of the epidemic has passed, ”the economist concluded.
Earlier, the US Federal Reserve reported lowering the key rate by 0.5 percentage points against the backdrop of developing risks caused by the situation with coronavirus.