This is the first emergency rate cut the fed has made since the 2008 financial crisis.
The US Federal Reserve on Tuesday urgently lowered its benchmark interest rate in an attempt to protect the world’s largest economy from the effects of the coronavirus. The head of the Federal Reserve Jerome Powell suggested that the threat to the economy from the coronavirus would disappear soon.
“The virus and the measures taken to contain it will certainly harm economic activity both here and abroad for some time,” Powell said at a news conference after the fed announced a rate cut of half a percentage point to 1.00% – 1.25%.
The decision to cut the rate was supported unanimously by all members of the open market Committee, which runs the fed. This reduction was the first emergency measure taken by the fed since 2008 when such a decision was made by the Federal Reserve at the height of the financial crisis.
US Treasury Secretary Steven Mnuchin welcomed the fed’s decision, saying it would help the us economy.
President Trump commented on the rate cut on Twitter, urging the Central Bank to continue its actions in this direction. “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!, ” the President wrote.