Fed used "most powerful tool" too soon by cutting rates, investors say

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By Jennifer Kang
05 Mar 2020

The Federal Reserve cut interest rates two weeks before its regularly scheduled meeting in an attempt to boost confidence of markets severely impacted by Covid-19 fears. Market participants, however, tell GlobalCapital they worry that the bank is spending its ammunition too quickly to remedy a complicated issue that requires a medical solution, not a monetary one.

On Tuesday, the central bank cut interest rates by 50bp, bringing the target range for the federal funds rate to 1%-1.25%. The cut was driven by the coronavirus outbreak, which "poses evolving risks to economic activity," according to a press release issued by the Federal Open Market Committee ...

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