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.

Democrats realize they love Haley Stevens, just a little too late

Veteran pediatrician hails Medicaid shift ending youth sex-change treatments: ‘This is not denial of care’

Legal expert calls for Smithsonian leadership overhaul over ‘self-loathing’ portrayal of history: ‘It’s bile’

Man charged with assault, hate crimes after allegedly disrupting Shabbat services at NYC synagogue

Shake Shack worker allegedly calls out before robbing own restaurant, returns in uniform 2 days later

California Man Receives Postcard Sent by His Late Parents 26 Years Ago

DFW Airport scraps controversial Islamic foot-washing station plan as Texas Gov Abbott takes aim

California teen faces prison after viral video shows him squaring up, repeatedly kicking sea lion in the face

Delta flight diverted twice after lavatory leak floods cabin, leaves passengers stranded for hours

Reagan National Airport makes drastic change following deadly 2025 midair collision

Watch: Little League Coach Declares, ‘Jesus Is Still Lord’ Live on ESPN

El-Sayed’s half sister offered Oct 7 ‘blessing,’ one year after Hamas attack: ‘Allahu Akbar’

Trump leaves stage mid-speech to embrace parents of 12-year-old killed by stray bullet in the Bronx

Trump’s fight over rarely used 18th-century deportation law lives on in latest court clash

President Trump claims AOC, far-left Democrats are backing away from controversial positions

“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.