- Fed Chairman Jerome Powell discussed the central bank’s interest rate Tuesday during a news conference.
- The Fed cut its benchmark funds rate by half a percentage point in response to the coronavirus spread.
The Federal Reserve moved to an enact an emergency interest rate cut after officials saw the coronavirus having a material impact on the economic outlook, Chairman Jerome Powell said Tuesday.
Powell held a news conference following the central bank’s decision to cut overnight interest rates by half a percentage point. He said the Fed “saw a risk to the economy and chose to act” in a cut announced at 10 am ET.
“The magnitude and persistence of the overall effect on the U.S. economy remain highly uncertain and the situation remains a fluid one,” he said. “Against this background, the committee judged that the risks to the U.S. outlook have changed materially. In response, we have eased the stance of monetary policy to provide some more support to the economy.”
The move took the Fed’s benchmark rate to a target range between 1%-1.25% and was the first intermeeting action since December 2008, during the financial crisis.
Markets had been volatile through the morning and fell sharply as Powell spoke.
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