On Tuesday, the US Federal Reserve announced it was cutting interest rates by 50 basis points in response to the economic slowdown caused by the coronavirus outbreak. The federal funds target rate range will now be between 1.00% and 1.25%. The move comes after criticism from President Trump, who has been calling for a rate cut for weeks.

The decision to cut rates comes as the US economy begins to show signs of slowing down. The coronavirus outbreak has forced many businesses to close, and consumer spending has decreased. The goal of the rate cut is to boost economic activity by making it easier for consumers and businesses to borrow money.

The announcement was made after an emergency meeting of the Federal Reserve. In a statement, the Fed said it was “closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy.”

While the rate cut was seen as a positive move by some, others have expressed concern about the potential negative impact it could have on the economy. Lower interest rates can lead to inflation, which can negatively impact consumers by making goods and services more expensive.

There are also concerns that the rate cut won’t do enough to stimulate the economy. With businesses closed or limited in their operations due to the coronavirus outbreak, it’s unclear if borrowing will increase. Some experts have called for more direct assistance to businesses affected by the outbreak, such as tax breaks or loans.

Despite the concerns, the rate cut is seen as a major move by the Fed to support the economy during a time of uncertainty. The impact of the coronavirus outbreak on the global economy is still unknown, but the Fed’s decision to act quickly is seen as a positive step towards stabilizing the US economy.

By Carlos

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