Federal Reserve makes emergency US rate cut to fight coronavirus slowdown – business live
In an emergency move, the US central bank has cut borrowing costs by 50 basis points and warns that the coronavirus “poses evolving risks to economic activity”
- Latest: Fed chair Jerome Powell’s press conference
- NEWSFLASH: FED EMERGENCY RATE CUT
- Read the full statement
Earlier:
- Finance ministers and central bankers issue joint statement
- Mark Carney says Bank of England is preparing for coronavirus shock
- Last night, the Dow surged by 5%
Time for a quick recap
Related: Coronavirus: Iran to mobilise 300,000 soldiers and volunteers as 23 MPs infected – latest news
European stock market have ended the day with gains, but have fallen back from their highs earlier in the day.
The emergency US interest rate cut boosted equities initially, but that quickly unravelled as investors questioned how much good it would do.
S&P 5001.5%
Dow1.8%
Nasdaq1.3%
Historically, each time (except for once), the day an emergency rate cut was announced, stocks ended the day at least 1% in the red. We’re way past that.
Oil also taking its cue from risk. Likely fading more on broader sentiment, not OPEC.
“For a start, rate cuts reduce bank income, at a time banks need to be supporting the economy through a potential cash flow squeeze. Rate cuts also help little if consumers stay at home in large numbers.
“What is needed is targeted central bank help for the corporate sector – loans and bond purchases – and targeted government help for workers – tax holidays and sick pay.”
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