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Fed Announces Rate Cuts in Response to Coronavirus
Jerome H. Powell, chairman of the Federal Reserve, held a news conference addressing emergency interest rate cuts in response to coronavirus fears.
We saw a risk to the outlook for the economy and chose to act. The effects are at a very early stage, but you are hearing concerns from people. For example, in the travel business or the hotel business and things like that. That’s what you’re hearing. But you don’t see things showing up in actual data. You do see them showing up in sort of sentiment forecast indicators, and things like that. We expect that will continue. It will probably grow. We do recognize that a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain. We get that. We don’t think we have all the answers, but we do believe that our action will provide a meaningful boost to the economy. More specifically, it will support accommodative financial conditions and avoid a tightening of financial conditions, which can weigh on activity and it will help boost household and business confidence. The U.S. economy is strong, and we will get to the other side of this. And I fully expect that we’ll return to solid growth, and a solid labor market.
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