Chairman Jerome Powell said at a news conference that the virus “will surely weigh on economic activity both here and abroad for some time.”
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 it’s cut rates between policy meetings since the 2008 financial crisis, and it is the largest rate cut since then.
The Dow Jones Industrial Average, which had been down as much as 356 points shortly before the Fed’s announcement, initially jumped on the news. The surge was short-lived. By late afternoon, the Dow had tumbled more than 600 points in a sign of nagging worries about economic damage from the virus. Still, on Monday, the Dow had rocketed up nearly 1,300 points — its largest percentage gain since 2009.
The yield on the 10-year Treasury note briefly fell below 1% for the first time ever. Investors around the world bid up bond prices — which move in the opposite direction of yields — as they sought safety from the stock market’s turmoil.
The fear that coursed through financial markets after the Fed’s announcement underscored the worry that there are limitations to what the Fed and other central banks can do to resolve a crisis of this kind. Powell acknowledged as much when he observed that the “ultimate solution to this challenge will come from others, most notably health professionals.”
Indeed, the Fed’s announcement of a steep rate cut signaled its concern that the coronavirus, which is depressing economic activity across the world, poses an escalating threat and could trigger a recession. Rising uncertainty about how and when the threat will be resolved is pressuring markets. Powell said that since last week, when several Fed officials had said they saw no urgent need to cut rates, “we have seen a broader spread of the virus.”
This story is from the March 06, 2020 edition of AppleMagazine.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the March 06, 2020 edition of AppleMagazine.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Browsing in Incognito Mode Doesn't Protect You as Much as You Might Think
Although a private browsing mode known as “Incognito” in Google’s widely used Chrome browser has been available for nearly a decade, a legal settlement involving the way it works has cast new attention on this commonly available setting.
EUROPEAN UNION QUESTIONS TIKTOK ON NEW APP THAT PAYS USERS FOR WATCHING
European Union regulators said this week they're seeking details from TikTok on a new app from the video sharing platform that pays users to watch videos.
UBER AND LYFT DELAY THEIR PLANS TO LEAVE MINNEAPOLIS AFTER OFFICIALS PUSH BACK DRIVER PAY PLAN
The ride-hailing companies Uber and Lyft said they will delay their planned exit from Minneapolis after city officials decided to push back the start of a driver pay raise by two months.
FACED WITH POSSIBLY PAYING FOR NEWS, GOOGLE REMOVES LINKS TO CALIFORNIA NEWS SITES FOR SOME USERS
Google began removing California news websites from some people's search results, a test that acted as a threat should the state Legislature pass a law requiring the search giant to pay media companies for linking to their content.
NASA IS SEEKING A FASTER AND CHEAPER WAY TO BRING MARS SAMPLES TO EARTH
NASA's plan to bring samples from Mars back to Earth is on hold until there's a faster, cheaper way, space agency officials said.
TESLA TO ASK SHAREHOLDERS TO REINSTATE $55 BILLION PAY PACKAGE FOR MUSK REJECTED BY DELAWARE JUDGE
Tesla will ask shareholders to reinstate a compensation package for CEO Elon Musk potentially worth $55 billion that was rejected by a judge in Delaware this year and to move the electric car maker's corporate home from Delaware to Texas.
MASSACHUSETTS OFFICIAL WARNS AI SYSTEMS SUBJECT TO CONSUMER PROTECTION.ANTI-BIAS LAWS
Developers, suppliers, and users of artificial intelligence must comply with existing state consumer protection, anti-discrimination, and data privacy laws, the Massachusetts attorney general cautioned this week.
NISSAN SAYS IT WILL MAKE NEXT-GENERATION EV BATTERIES BY EARLY 2029
Nissan expects to mass produce electric vehicles powered by advanced next-generation batteries by early 2029, the company said this week during a media tour of an unfinished pilot plant.
BIDEN ADMINISTRATION AGREES TO PROVIDE $6.4 BILLION TO SAMSUNG FOR MAKING COMPUTER CHIPS IN TEXAS
The Biden administration has reached an agreement to provide up to $6.4 billion in direct funding for Samsung Electronics to develop a computer chip manufacturing and research cluster in Texas.
ONLY 26% OF AMERICANS SAY THEY GET AT LEAST EIGHT HOURS OF SLEEP, NEW GALLUP POLL SAYS
If you’re feeling — YAWN — sleepy or tired while you read this and wish you could get some more shut-eye, you’re not alone.