Fed Announces Emergency Rate Cut To Ease Impact Of Coronavirus
The coronavirus outbreak that began in Wuhan, China, in late 2019 has spread fast and caused global panic. Even the financial markets have suffered, causing the Federal Open Market Committee (FOMC) of the Federal Reserve to decrease its rate by half a percentage point in an emergency move. This sets the Fed's target interest range for federal funds at 1-1.25 percent.
The unanimous decision to drop rates, announced Tuesday, was made during an urgent session less than two weeks before the FOMC's next scheduled meeting. The last time the Fed made such an emergency change was more than a decade ago, during the 2008 housing crisis. Indeed, investors recently had their worst week on the market since the Great Recession. Fears of an imminent coronavirus pandemic caused major stock indices to tumble over ten percent.
According to a statement released by the FOMC, "The coronavirus poses evolving risks to economic activity." Mortgage rates have already declined since the o...
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