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.

Twice-Deported Illegal Alien Triggers Hijack Alert on United Flight After Rushing Cockpit: DHS

French novelist who wrote about Muslim-leftist takeover charged with hate speech for ‘Great Replacement’ comments

Democrats Are Turning on Each Other After Bizarre Absences Cause Hegseth Impeachment Effort to Fail

Wes Moore’s military record under renewed scrutiny after Army supervisor disputes his Afghanistan combat claims

Trump 45 alumni get behind a new name for press secretary

Hegseth could face new impeachment push over Ukraine aid, lawmakers warn

Ilhan Omar appears clueless on basis for federal probes: ‘You probably have more details on that’

Cruise Ship Returns to Texas Port Shortly After Departure When Murder Victim Is Discovered On Board

Multiple Kennedy family members seek to join legal battle against Trump’s triumphal arch

10 Serial Killers Among Those Whose Sentences Were Commuted by Gavin Newsom

‘He blamed the Jews’: GOP congressman levels explosive accusation against JD Vance over election postmortem

Russia and Ukraine settle on large prisoner swap after no major developments from talks

Secretary Scott Bessent moved to military base over Iran threats and more top headlines

Slain New Jersey mom’s bedroom furniture removed by investigators months after unsolved stabbing

FIRST ON FOX: Supreme Court justices confront what it will take to keep America’s founding freedoms alive

“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.