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Federal Reserve Cuts US Rates By Half Point Ahead of March Meeting Due to Coronavirus

© REUTERS / Leah MillisFILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019
FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019 - Sputnik International
WASHINGTON (Sputnik) - The Federal Reserve said in a statement on Tuesday that it has cut US interest rates by half a point in an unusual move ahead of its upcoming monthly policy meeting March 17-18 in order to mitigate threats to the economy stemming from the novel coronavirus outbreak.
"The fundamentals of the US economy remain strong," the statement 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."

The Federal Reserve also said the "Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy."

The move came after President Donald Trump renewed criticism of the Federal Reserve for being slow to cut interest rates and after the US stock market suffered its worst weekly drop since on fears over the coronavirus’ economic impact.

A view of the Federal Reserve - Sputnik International
US Fed Unlikely to Cut Interest Rates Over Coronavirus - White House Economic Adviser
Trump, who is seeking reelection in November, regularly tweets about the stock market’s performance as a measure of his success in office.

Shortly after the Federal Reserve’s statement, US stocks turned positive, with the broad Dow Jones Industrial Average index rising 0.8 percent by 10:30 a.m. EST (3:30 p.m. GMT).

As US stocks plunged about 16 percent on the week last Friday, Federal Reserve Chair Jay Powell said they were monitoring the novel coronavirus crisis to determine appropriate action.

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