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.

Blue state mayor arrested for fraud sparks uproar for not speaking English in viral clip: ‘How is this real’

Socialists accused of ‘motor mouth’ rhetoric as longtime Dem strategist unloads on far-left candidate

Sammy ‘The Bull’ Gravano recounts turning on John Gotti

Tragedy Deepens as Hayden Panettiere Dad’s Friends Reveal He Was Only Just Beginning to Recover from Losing Son

Cop Fired After Allegedly Using Flock Cameras to Stalk Former Boyfriend – She Abused System 166 Times

Andy Burnham insists ‘zero consequence’ from falling for Susie Wiles impersonator as ministers’ phone numbers appear online

Appeals court upholds limits on warrantless ICE arrests at churches

Antisemitism fight explodes in Florida as voters head to the polls: ‘Political pogrom’

Lindsay Clancy’s family was ‘very concerned’ about her mental health in the months before she killed her kids

White House tears into Ossoff with brutal takedown after jab at key Trump aide: ‘Lightweight loser’

WNBA Forced to Issue Another Humiliating Response After Mom, Daughter Made to Cover Pro-Girl Shirts Opposing Trans Players in Women’s Sports

ICE Nabs Twice-Deported, Previously Convicted Drug Trafficker with 126 Kilos of Meth in Georgia

Iran fails to strike deal with US as deadline passes and Trump calls for ‘white flag of surrender’

Democrat Party’s civil war heads to Florida, Alaska and Wyoming and more top headlines

[4] Massachusetts Mayor Charged in Alleged $1.5 Million Pandemic-Era Loan Fraud And Money Laundering Scheme

“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.