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.

United Cajun Navy offers search and rescue services in hunt for Nancy Guthrie

WATCH: Mamdani Was Filmed Praising Group of Muslims Who Glorify Killing Christians and Jews

Security guard, Arizona moving company employees help recover 2-year-old allegedly taken by unrelated woman

Rubio, Ratcliffe to deliver classified Iran briefing to Gang of Eight ahead of Trump’s State of the Union

Erika Kirk to be Trump’s guest at State of the Union

CNN Data Analyst Calls 2028 Democrat Field a ‘Clown Car,’ Says Newsom Is ‘Flailing’

Iowa congressman took cash from Chinese companies buying American farmland

Dem rep identifies himself as one of this year’s State of the Union designated survivors

Evil: Newsom’s Team Decides to Free Child Molester Whose Crimes We Can’t Fully Describe Here (and You Wouldn’t Want Us To)

Pure Gold: GOP Gov. of Mississippi Offers to Send Reading Teachers to Coach Gavin Newsom Since Black Students in MS Are 2.5x Better Readers Than in CA

Growing number of Democrats skipping Trump’s 2026 State of the Union

Savannah Guthrie offers $1 million family reward for recovery of Nancy Guthrie

France restricts Trump ambassador’s access to officials after missed summons

Idaho woman accused of attempting to set fire to DHS building with stolen ambulance

Alert: Massive Development Reported in DOJ’s Sedition Case Against Mark Kelly, Others – Bad News for Trump Admin

“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.