In a surprise move, the U.S. Federal Reserve announced on Tuesday that it will be cutting interest rates by as much as 10 basis points to keep markets competitive in the face of coronavirus fears.
The announcement comes after volatile activity on Wall Street. Just last week, the DOW Jones Industrial Average saw its sharpest slump in market history, with NASAQ following suit. On Monday, markets rebounded, suggesting markets have become more comfortable with how global governments are handling the problem.
“The coronavirus poses evolving risks to economic activity,” the Fed said in a statement to the press. “n 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.”
President Donald Trump appeared to welcome the interest rate cut, although he has suggested that more cuts would be appropriate.
….paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!
— Donald J. Trump (@realDonaldTrump) March 3, 2020
The Fed’s emergency cut is the first such move since the financial crisis of December 2008. In reaction to the news, markets rallied following a week of stocks dipping into correction territory.
Here’s Fox Business with more information.