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.
Sean Strickland removed from UFC White House event by Secret Service
National Guardsman pleads guilty to fatal shooting of soldier he found in bed with his ex-girlfriend
Eric Trump denies asking former UFC star if White House fights were rigged
Trump announces peace deal with Iran, declares Strait of Hormuz will reopen: ‘Let the oil flow!’
Trump arrives for UFC fight
Boston police arrest 14-year-old after masked suspects allegedly rob siblings’ lemonade stand
Congressional baseball game offers longstanding traditions, and plenty of confusion
11 skydivers, one pilot killed in Missouri plane crash near airport
Sen Mitch McConnell hospitalized, ‘receiving excellent care,’ his office says
Republican leaders embrace viral World Cup fans they say are discovering the ‘real America’
Gabbard says declassified biolab records validate concerns previously dismissed as misinformation
Trump marks 80th birthday, now second octogenarian sitting president: ‘Seemed to utterly defy age’
Another One: German Woman Beheaded, Homeless African Male Arrested for Murder Earlier in 2026
Is AI Making Your Kids Dumber? Over Half of Teachers Surveyed Say It May Be
Spy Agencies Have Exploded in Size – Trump’s Intel Chiefs Are the First to Downsize
“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.
Sean Strickland removed from UFC White House event by Secret Service
National Guardsman pleads guilty to fatal shooting of soldier he found in bed with his ex-girlfriend
Eric Trump denies asking former UFC star if White House fights were rigged
Trump announces peace deal with Iran, declares Strait of Hormuz will reopen: ‘Let the oil flow!’
Trump arrives for UFC fight
Boston police arrest 14-year-old after masked suspects allegedly rob siblings’ lemonade stand
Congressional baseball game offers longstanding traditions, and plenty of confusion
11 skydivers, one pilot killed in Missouri plane crash near airport
Sen Mitch McConnell hospitalized, ‘receiving excellent care,’ his office says
Republican leaders embrace viral World Cup fans they say are discovering the ‘real America’
Gabbard says declassified biolab records validate concerns previously dismissed as misinformation
Trump marks 80th birthday, now second octogenarian sitting president: ‘Seemed to utterly defy age’
Another One: German Woman Beheaded, Homeless African Male Arrested for Murder Earlier in 2026
Is AI Making Your Kids Dumber? Over Half of Teachers Surveyed Say It May Be
Spy Agencies Have Exploded in Size – Trump’s Intel Chiefs Are the First to Downsize
In his press conference, Powell said that the central bank was already seeing the effects in the travel and tourism industries and had heard concerns from businesses that rely on global supply chains. It is still too early to know how large or how long the impact on the U.S. economy will be, Powell said.
Trump responded to the cut with a call for the Fed to do more.
The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!
— Donald J. Trump (@realDonaldTrump) March 3, 2020
story cited here.
