WASHINGTON, D.C. – The U.S. Federal Reserve announced the largest rate cut since 2008 today in a move to try to offset economic fallout from complications arising from the Coronavirus epidemic.
In a statement, the Fed said today, “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.”
The 1/2 percentage point cut is the largest rate cut since 2008 when the stock market was in a free fall. Reportedly, the move by the Fed today is to allay fears of the Coronavirus and stop the current stock market sell off. After today’s announcement, the Dow Jones Average dropped 500 points. Further rate cuts are a possibility, multiple news outlets are reporting.
President Donald Trump praised the Fed’s rate cut today, tweeting, “The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!”
