Feds cut interest rate in response to coronavirus

WASHINGTON, D.C. (NBC) – The spread of the coronavirus prompted the Federal Reserve to cut its key interest rate in a bid to boost the economy.

Chairman Jerome Powell announced the surprise move in Washington, D.C. Tuesday.

It’s the central bank’s largest rate cut since the 2008 financial crisis and the first time since that crisis that the fed has cut its benchmark interest rate outside of a policy meeting.

Powell said board members saw a risk to the economy and chose to act. He explained, “Earlier today the Federal Open Market Committee announced a 1/2% point reduction in the target range for the federal funds rate, bringing that range to 1 to 1 and 1/4 %.”

Powell went on to say the fundamentals of the U.S. economy remain strong, but “the outbreak has also disrupted economic activity in many countries and has prompted significant movements in financial markets.”