How Long Will the Volatility Last?

economic damageArtTower / Pixabay

PHILADELPHIA – After several days of significant ups and downs in the markets, the economic damage caused by the coronavirus, due to both international health scares and perhaps American politics as well, nationally syndicated host and biblical investing authority Dan Celia is weighing in on an interesting week of financial headlines.

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The Volatility And Economic Damage Caused By Coronavirus

“After two back-to-back weeks of extreme volatility-most of it on the downside-it’s certainly not beyond the realm of possibility that we could see another 10% drop in the near term,” Celia said. “The question is: How long will this last? I don’t think it will last all year long; this is a transitory effect. Many claim that all this volatility is because of the economic damage stemming from coronavirus worries, and certainly that is true if we don’t start to see containment soon or a drop in cases due to warmer weather.

The lack of GDP growth globally is almost certain, but we’ll have to wait and see. U.S. equities will fare far better than most countries because we’ve started from a much higher place in a much stronger position, whereas everyone else’s economy was already extremely fragile before any of this started. For example, it’s likely that Germany will slip into recession this year.

“One of the biggest problems I am concerned about—but, apparently, I’m the only one—is, as I expected and talked about all week long, the U.S. dollar has fallen amid expectations that the Federal Reserve could cut interest rates even further,” he continued. “

First of all, let’s make something clear, and I’ll say it again—there is absolutely no reason for the Federal Reserve to have slashed rates by 50 basis points this week, and certainly there won’t be another emergency move that would cause the Fed to slash them again. The Federal Reserve in its Beige Book report mentioned the epidemic 48 times.

They do this to suggest that policymakers are highly concerned about economic damage from this disease. How about we get through this transitory effect before we start dropping rates?”

Impact On Our Treasury Bills

Celia added that he is all for trying to get ahead of a downturn, but this is not an economic downturn.

“This was not caused by a geopolitical event or an economic event that is likely to be long-lasting,” he said. “The Fed does not need to be trashing the dollar. And what about Treasury rates yesterday? Remember, our debt is desirable because we’re the strongest dollar in the world.

We were the only treasury bill or government bond that had a whole number in front of that decimal point. But it looks like that is going by the wayside, and we will be just like every other country. There will be no incentive and no reason for other countries to buy our debt. Then what?”

Celia discusses these and other global and economic headlines on his daily, three-hour Financial Issues program, heard on more than 660 radio stations and several television networks nationwide, including FISM.TV, viewed on several post-cable television platforms and online.

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About the Author

Dan Celia
Dan Celia is the CEO and President of Financial Issues Stewardship Ministries. Married to Registered Nurse, Yvonne, in 1980, Dan has two married daughters, is blessed with sons-in law who love the Lord, and has seven grandchildren. Dan has worked for 35 years as an entrepreneur and businessman, starting eight corporations and co-founder of two others. In 1999 Dan sold his Small Trust Company (managing over 900 million dollars) to go into Ministry. Dan has developed and uses a biblically-responsible system of financial management with great success. He started a radio ministry in 1997 as a part time ministry and has seen the Lord expand and bless this ministry to his current full-time ministry. Dan has interviewed newsmakers and pundits like Steve Forbes, Ben Stein, T. Boone Pickens, Tony Perkins, John Alison, Rayola Dougher API, Congressmen, Senators and Presidential candidates. He is proud of his partnership with the American Family Association where he serves as a board member. Dan is now on over 640 stations three hours daily, NRB TV, BizTV, Dove TV and CBN Life Style Network. Financial Issues is heard in every state in America and throughout the internet globally. Financial Issues has supporters from over 17 countries. Dan is a Regular Weekly Contributor to Townhall.com (the number 1 source for conservative news and analyzation). Dan has been a guest on Fox Business, Bloomberg, Salem Radio, Family Net, 700 Club,and many others . He is a conference speaker, author of six books, publishes a weekly newsletter and has been Executive Producer of several video productions and FISM TV is producing original family friendly content and other video projects all keeping with in FISM’s Christian world view.

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