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.

Dem lawmaker sparks online firestorm after saying Iryna Zarutska mural doesn’t align with city’s values

Former San Francisco Human Rights Commission leader accused of ‘self-dealing,’ public corruption

Ground Stops Ordered for DC-Area Airports

Vance: White House Plans to ‘Go After’ Ilhan Omar for Alleged Immigration Fraud

NYC Dem, Hochul aide under investigation over alleged migrant shelter bribes

Democrats pounce on $4 a gallon gas, blame Trump’s Iran war for ‘broken promise’

Woman Tries Getting Birth Certificate, SS Card, and Marriage License to See if Dems Are Honest – Says She Caught Them Lying Through Their Teeth

Trump Seethes After France Blocks American Military Planes: ‘The USA Will Remember’

Hegseth reveals covert visit to troops fighting in Operation Epic Fury

Trump’s proposed presidential library revealed as towering Miami skyscraper in striking new video

Outrage grows as ICE detainer ignored in connection to killing of 24-year-old mother and more top headlines

Scoop: House Speaker Mike Johnson’s allies unleash $10M campaign to spotlight Trump tax cuts

Florida county’s Democratic Party chair accused of hitting man in head with bullhorn at ‘No Kings’ protest

Trump reveals first look at presidential library in Miami

Teacher of the Year finalist gets 14 years for sexual relationship with student she kept contacting

“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.