Federal Reserve Bank Cuts Interest Amid Coronavirus Economy Impact Fears

Jerome Powell 2016. Photo by Federal Reserve.

The Federal Reserve Bank on Tuesday lowered the benchmark interest by half a percentage point amid growing concerns of the economic impact of the coronavirus.

The Federal Reserve offered this statement:

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 Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy.

FOMC statement. 03/03/2020.

The Washington Post explains that Tuesday’s emergency rate cut is the biggest cut since 2008’s financial crisis. The rate cut puts U.S. interest rates just below 1.25 percent down from 1.75 percent.

Global economic leaders said Tuesday morning that they were “ready to take action,” to stabilize the global economy from the threat of the coronvirus.

The emergency move comes as Wall Street suffered heavy losses last week, but gained almost 1,100 points on Monday.

The move by the Federal Reserve is likely to raise questions as to whether or not the central bank felt pressure from President Trump aka President Impeached to act quickly, given the President attacked Federal Reserve Chairman Jerome Powell, 4 times on Twitter between Monday and early Tuesday morning.

President Impeached reacted to the cut via Twitter calling for further cuts and more “easing.”

President Impeached deleted the above tweet only to reissue the same tweet.

Shortly after the announcement the stock market dipped into negative territory.

Currently the DOW is trending down after rebounding slightly according to Business Insiders live DOW ticker.

Powell is expected to address the media at 11 a.m. est time.

Live Feeds.


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About Tiff 2131 Articles
Member of the Free Press who is politically homeless and a political junkie.