Major banks downgraded as Fed leaves rates unchanged
NYC, NY, United States (AHN) – Ahead of the much anticipated release of the Fed’s additional stimulus for the ailing United States economy, Moody’s Investor Service downgraded three of the world’s largest banks.
Moody’s cut Bank of America’s rating two notches to Baa1; Wells Fargo’s long term debt was cut one notch to A1; and Citigroup’s long term rating was also cut one notch to Prime-2. Moody’s slapped a negative outlook on all three.
Shortly after 2:15 p.m. EST, the Fed announced no change in interest rates. The market reacted by falling nearly 100 points. Treasuries rallied.
The Federal also announced, in a move dubbed “Operation Twist,” that is would buy $400 billion of long-term Treasuries by the end of 2012, and sell an equal amount of short-term Treasuries in an effort to stimulate the economy by pushing the average maturity of its $2.7 trillion balance sheet further out.
Gold was off about $13 dollars before and following the news.
Now comes the digestion and analysis of the Fed’s words, tone and moves.
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