The Federal Reserve on Tuesday announced that in response growing demand and supply-side impacts of the coronavirus it was reducing the target range for the federal funds rate by 50 basis points, lowering the target to 1 1/4 and 1 percent. This is the first time since 2008, the FOMC enacted a federal funds rate cut outside of the typical meeting schedule. It was adopted unanimously and just two weeks before their scheduled March meeting. The target rate is now the lowest since late 2017, completely unwinding the rate hikes of 2018. The Fed’s statement noted that the “fundamentals of the U.S. economy remain strong.” However, the Fed’s statement also noted that the virus poses “evolving risks to economic activity.”
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Federal Reserve Enacts 50 Basis Point Rate Cut