Supporting the global financial system through the coronavirus outbreak is the best course of action

Editorial: Central banks and governments are right to do what they can to ease the pressure, even if we can’t be sure of the full impact of the virus yet

The response of the equity markets to all this largesse was a raspberry – another slide in equity markets globally (AFP/Getty)

The market response to the latest injection of cash by central banks into the global financial system is not what the authorities must have hoped for. Last week the United States Federal Reserve announced an emergency interest rate cut and a programme to move $1.5 trillion into the markets to keep the banks solvent and able to help commerce during the coronavirus crisis.

Now they have acted again, with a further emergency cut in rates, to the range of zero to 0.25 per cent, and another $700bn being pumped into the system.

To give such sums their full dignity by notating them fully, that amounts to some $2,200,000,000,000 in US central bank money in all, with another substantial slug from the central banks of Europe, Japan, India, China, South Korea, Canada, Australia and the UK. The US moves were made in concert with other central banks across the world. Every official, including Fed chair Jay Powell, has decreed that they will do whatever it takes, or some similar formulation, to keep the world economy safe. Well they might, when China’s set to shrink this quarter, the first such decline in decades, threatening a global recession.