BREAKING: US Federal Reserve cuts benchmark interest rate by half-point, most since 2008, to offset coronavirus impact.
WASHINGTON — In a surprise move, the Federal Reserve cut its benchmark interest rate by a sizable half-percentage point Tuesday in an effort to support the economy in the face of the spreading coronavirus.It was the Fed’s first move since last year, when it reduced its key short-term rate three times. It’s also the first time the central bank has cut its key rate between policy meetings since the 2008 financial crisis, and it is the largest rate cut since then.
Lower borrowing rates can lead people and businesses to borrow and spend, which can boost economic activity. But they can’t directly address the problems the virus has caused — from closed factories to canceled business travel to disrupted company supply chains. Google told its 8,000 full-time staffers and contractors at its European headquarters in Dublin to work from home Tuesday. Irish news reports have said that a Google staffer is being tested for coronavirus. But the company issued only a brief statement that said it was continuing to take precautionary measures to protect the health and safety of its workforce.
Ashworth noted that the Fed’s statement Tuesday repeated language it has used in the past that it would act as appropriate.” He said this may suggest that the Fed is leaning toward an additional rate cut, perhaps as soon as its next scheduled policy meeting in two weeks. The G-7 has issued similar joint statements during periods of extreme market turmoil, such as the Sept. 11, 2001, terrorist attacks and the 2008 financial crisis.
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