(TargetLiberty.org) – One look at the stock market will tell you that the world is feeling a fair amount of anxiety and panic over the ongoing coronavirus outbreak. Prices have been wildly volatile in recent days — and it doesn’t look like they will stabilize anytime soon.
In response, the Federal Reserve slashed interest rates on Tuesday morning, hoping to give the market a boost. The Central Bank saw a 50 basis-point reduction, which hasn’t happened since the financial crisis of 2008.
This reduction lowered the fed funds rate to a range of 1% to 1.25%. However, President Trump is pushing for rates to drop even lower.
The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!
— Donald J. Trump (@realDonaldTrump) March 3, 2020
The intent is for these lower interest rates to stimulate the economy by encouraging people to invest. For the average American, it means lower interest rates on loans, such as mortgages. Currently, mortgage rates are the lowest they’ve been since 2016 and could drop even lower.
According to Fed Chairman Jerome Powell, the global coronavirus outbreak “has brought new challenges and risks.” As a result, central banks around the globe are “doing what makes sense in their particular institutional contexts.”
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