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

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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