Fed cuts interest rates by half a percentage point over coronavirus

People wearing face masks walk on a street in Shanghai, March 3, 2020.Hector Retamal/AFP/Getty Images

“The fundamentals of the U.S. economy remain strong,” a statement from the Federal Reserve said. “However, the coronavirus poses evolving risks to economic activity. In 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 by 1/2 percentage point, to 1 to 1‑1/4 percent.”

World finance leaders from the Group of 7 nations also held a call Tuesday led by Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Steven Mnuchin. They issued a rare joint statement saying they “are ready to take actions” and will “use all appropriate tools” to support the global economy amid the outbreak of the novel coronavirus–though they failed to outline any concrete steps they were taking to cushion the economic blow of the outbreak.

The Organization for Economic Co-operation and Development called for urgent government action to aid the economy amid the outbreak on Monday, and slashed its global growth outlook for the year.

“Governments need to act immediately to contain the epidemic, support the health care system, protect people, shore up demand and provide a financial lifeline to households and businesses that are most affected,” Laurence Boone, the OECD’s chief economist, said while presenting the findings during a teleconference Monday.

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