UPDATED 10:21 AM PT — Tuesday, March 3, 2020
The Federal Reserve made a rare inter-meeting decision to cut interest rates to counter the economic impact of the coronavirus outbreak. The central bank lowered rates by 50 basis points on Tuesday to a range of one to 1.25 percent.
This decision came ahead of the bank’s next formal meeting, which is set for March 18, 2020. Analysts had expected the Fed to lower rates at that meeting as the coronavirus continues to spread.
In a recent press conference, Federal Reserve chairman Jerome Powell spoke about how the spread of the virus is beginning to impact the U.S. economy.
“We’ve seen it begin to spread a bit here in the United States, but for us what really matters, of course, is not the epidemiology,” he explained. “…but the risk to the economy, so we saw a risk to the outlook for the economy and chose to act.”
Powell said the Federal Reserve is working with other central banks around the world as they continue to monitor the economic impact of the outbreak.
In a statement, the Fed noted that “the fundamentals of the U.S. economy remain strong, however, the coronavirus poses evolving risks to economic activity.”
Press Conference materials: https://t.co/MJ4D54XMoS
— Federal Reserve (@federalreserve) March 3, 2020