News Opinons

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.


Migrant Smuggling Cartels Make Billions
Adam Kinzinger ‘Drunk-Tweets’ His Way Into Total Embarassment
German Govt Warns Gas May Run Out over the Winter Months
Newsom Angry at Oil Companies for Obeying the Laws He Passed
Stunning Moment Cheating Scandal Allegedly Uncovered at Pro-Fishing Tournament
Nancy Pelosi Says We Need Illegal Immigrants To ‘Pick The Crops’
Bill Maher’s Liberal Audience Applauds When He Suggests Biden Dump Kamala Harris In 2024
John Fetterman Gives Puzzling Response When Answering Question During Interview
Biden Thanks Coast Guard Rescue Swimmer He’s Kicking Out over Vaccine Mandate
Kamala Harris Blasted For Pushing ‘Racist’ Policy In Response To Hurricane Damage
Jill Biden Shoves Joe off the Stage as Reporters Shout Questions
Peter Strzok FBI Termination Letter… And It’s Awesome…
Elon Musk Slams Kamala Harris For Racial Remarks About Distributing Disaster Assistance
Pro-Vax Doc Believes COVID Booster Accelerated His Cancer
Joe Rogan Clangs the Bell on ‘Dangerous’ Biden: ‘Like, I’d Vote for Trump…’

See also  CNN’s Don Lemon Tries To Blame Hurricane Ian On Climate Change. NOAA’s Hurricane Director Shuts Him Down.

“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.

See also  California Man Arrested After Allegedly Planning 'Las Vegas-Style' Massacre


Migrant Smuggling Cartels Make Billions
Adam Kinzinger ‘Drunk-Tweets’ His Way Into Total Embarassment
German Govt Warns Gas May Run Out over the Winter Months
Newsom Angry at Oil Companies for Obeying the Laws He Passed
Stunning Moment Cheating Scandal Allegedly Uncovered at Pro-Fishing Tournament
Nancy Pelosi Says We Need Illegal Immigrants To ‘Pick The Crops’
Bill Maher’s Liberal Audience Applauds When He Suggests Biden Dump Kamala Harris In 2024
John Fetterman Gives Puzzling Response When Answering Question During Interview
Biden Thanks Coast Guard Rescue Swimmer He’s Kicking Out over Vaccine Mandate
Kamala Harris Blasted For Pushing ‘Racist’ Policy In Response To Hurricane Damage
Jill Biden Shoves Joe off the Stage as Reporters Shout Questions
Peter Strzok FBI Termination Letter… And It’s Awesome…
Elon Musk Slams Kamala Harris For Racial Remarks About Distributing Disaster Assistance
Pro-Vax Doc Believes COVID Booster Accelerated His Cancer
Joe Rogan Clangs the Bell on ‘Dangerous’ Biden: ‘Like, I’d Vote for Trump…’

In his press conference, Powell said that the central bank was already seeing the effects in the travel and tourism industries and had heard concerns from businesses that rely on global supply chains. It is still too early to know how large or how long the impact on the U.S. economy will be, Powell said.

Trump responded to the cut with a call for the Fed to do more.

story cited here.

See also  Adam Kinzinger 'Drunk-Tweets' His Way Into Total Embarassment
Share this article:
Share on Facebook
Facebook
Tweet about this on Twitter
Twitter

→ What are your thoughts? ←
Scroll down to leave a comment: