Fed Announces Emergency Rate Cut to Fight Coronavirus Economic Risks

The Federal Reserve announced an emergency interest rate cut Tuesday, saying it was slashing its benchmark target by half a percentage point to combat the risks by the global outbreak of the coronavirus.

This was the largest move in interest rates since the Fed cut rates during the financial crisis and the first emergency cut since late 2008. Typically, the rate target only moves its rate target at scheduled meetings. The next meeting is set to begin in two weeks.

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1‑1/4 percent,” the Fed said in a statement.

In a press conference held after the announcement, Fed chair Jerome Powell said outbreak had disrupted economic activity in many countries and led to “significant movements” in financial markets.

Federal judge blocks Trump DOJ threats against election workers ahead of 2026 midterms

California woman accused of killing trans son-in-law puts blame on husband in new docs: reports

Polish president forces his way into high court after dramatic return as supporters clash with police

Sheriff’s department gives update on Nancy Guthrie case 9 months after kidnapping

CEO of California-Based In-N-Out Burger Teases Major Expansion East

Masked Invaders Stage Terrifying Armed Attack on CEO’s Family Home: Both Daughters Shot, Wife Struck with Hammer

Carney aims for June deal with EU to define ‘associate member’ status in bid to undercut US influence

EXCLUSIVE: ICE captures illegal alien at center of NYC manhunt after sanctuary city release

Absurd: ICE Agent Faces Assault Charge in Texas for Striking Fleeing Illegal Immigrant

WATCH: Air Force One Performs ‘Epic’ Halloween Flyover for White House Trick-or-Treaters

DOJ insists it just wants Alaska ballots preserved and isn’t seeking to change votes

BREAKING: Bessent and FBI Director Kash Patel Announce Multimillion-Dollar Fraud Arrests in Sweeping Minnesota Crackdown

Heroic Crack Shot Local Cop Sniper Who Saved Trump’s Life ‘Erased’ from News by Embarrassed Feds: Family

North Korean Hackers Pulled Off ‘Largest Bank Heist in Human History’ by Infiltrating Crypto Exchange

‘Biscuit’ the dog is latest dead felon to get their voting rights back from Spanberger, confused owner says

“The virus and the measures being taken to contain it will surely weigh on economic activity both here and abroad for some time,” Powell said.

The rate cut comes after ten days or so of mounting concerns over the coronavirus roiling financial markets. President Donald Trump has urged the Fed to take action a number of times over the past week, arguing that the central bank had to deploy a more accommodative monetary policy to deal with the economic risks because Democrats in Congress were unlikely to vote for a tax cut to stimulate growth.

Powell denied that pressure from the president had played any role in the decision to cut rates, saying the Fed had only taken into account its analysis of the economic situation in light of its mandate to foster price stability and maximum employment.

“We’re never going to consider any political considerations whatsoever. We will not do that and it’s very important that the public understand that,” Powell said.

Financial markets themselves have pressured the Fed, pushing longer-term interest rates to record lows and fed funds futures prices to reflect what amounted to a demand by investors that the Fed move off its previous “wait and see” stance.

The first U.S. deaths from the coronavirus were reported Saturday. At the time of the Fed announcement Wednesday, the death toll had climbed to 6. Some have argued that the health impacts in the U.S. are unlikely to be large and described the coronavirus as likely to be similar to a “very bad flu season.” Powell pointed out that the economic toll could still be significant.

“For us what really matters is not the epidemiology but the risks to the economy. So we saw the risks to the economy and chose to act,” Powell explains.