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.

Republican Lawmaker Crashes Woke Church’s Gun Buyback Scheme With Ingenious Play

Trump warns Iran’s ‘clock is ticking’: Move ‘fast’ or ‘there won’t be anything left’

Dad Innocently Opens Lid to Weird, Old Bottle – Moments Later the Ground’s on Fire, the Bomb Squad’s Coming, and He’s Headed to the Hospital

Fox News’s Kayleigh McEnany on faith, family, and career

Senate parliamentarian rejects $1 billion in reconciliation bill for White House security, Trump ballroom

US Deportations to El Salvador Double as Bukele, Trump Continue to Clean up Crime in Both Countries

Interrogation video shows trans killer’s calm confession to ambushing parents over gender transition battle

Alarming Change in Middle East Geography Is Setting Stage for the Bible’s Armageddon Prophecy

Bishop Barron contemplates ‘paradox’ of ‘free exercise of religion’ in US ahead of Rededicate 250

Trump, Netanyahu to speak Sunday amid reports of potential revival of military action on Iran

Teen vanished from home decades ago – now feds hope new image and shifting loyalties reveal truth

2026 Oregon primary features a candidate who is a pencil

Trump calls out Rep Thomas Massie: ‘Kentucky, get this LOSER out of politics’ Tuesday

Survivors of Plane Crash Off Florida Were Stranded on a Life Raft With No Idea If Help Was Coming

“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.