Yesterday, U.S. equity markets surged, as Wall Street rebounded from its worst week since the 2008 financial crisis.
By the close of Wall Street, US stocks rebounded sharply, with the Dow logging its biggest point gain in history.
President Trump has been relentless in his criticism of Federal Reserve Chair Jerome Powell for being slow to act to cut interest rates in midst of a global economic crisis over coronavirus fears.
Yesterday, Trump tweeted about Powell “being slow to act,” adding that other countries like Germany, “are pumping money into their economies.”
Again today, Trump tweeted about how other countries have cut their interest rated to ease the markets over “China’s coronavirus situation and slowdown.”
Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so. Our Federal Reserve has us….
….paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!
“The U.S. should have, for all of the right reasons, the lowest Rate. We don’t, putting us at a competitive disadvantage. We should be leading, not following!” Trump wrote.
CNBC is now reporting that the Federal Reserve announced an emergency rate cut Tuesday of half a percentage point in response to the growing economic threat from the novel coronavirus.
The move was the first such cut since December 2008, during the financial crisis. It comes amid a volatile patch on Wall Street and amid a steady stream of hectoring from President Donald Trump, who has called for lower rates to stay competitive with policy at other global central banks.
“The coronavirus poses evolving risks to economic activity,” the Fed said in a statement. “In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.”
At a news conference later, Chairman Jerome Powell said the Fed took action after officials saw the coronavirus was having a material impact on the economic outlook.
“The magnitude and persistence of the overall effect on the U.S. economy remain highly uncertain and the situation remains a fluid one,” he told reporters. “Against this background, the committee judged that the risks to the U.S. outlook have changed materially. In response, we have eased the stance of monetary policy to provide some more support to the economy.”
Trump said in a tweet that the cut isn’t enough, though Treasury Secretary Steven Mnuchin said “I applaud the Fed on this move.”
Markets were volatile after the move, initially surging then briefly turning negative before heading back up again as participants gauged what impact the cut would have.