National
Federal Reserve announces first emergency rate cut since the financial crisis
(CNN) — The Federal Reserve slashed interest rates by half a percentage point on Tuesday, a bold attempt to give the US economy a jolt in the face of concerns about the coronavirus outbreak.
It was the first unscheduled, emergency rate cut since 2008, and it also marks the biggest one-time cut since then. The new benchmark interest rate is 1% to 1.25%.
Although the fundamentals of the US economy remain strong, “the coronavirus poses evolving risks to economic activity,” the central bank said in a statement.
Fed Chairman Jerome Powell echoed this sentiment during a press conference Tuesday.
“We saw the risk to the outlook to the economy and chose to act,” Powell said, adding that the financial markets are functioning normally, the economy continues to perform well, and he expects the United States to fully recover after the outbreak ends.
The emergency cut could help stimulate the US economy, but it also signaled that the outlook for America might have been in more jeopardy than previously thought. The US stock market tumbled, with the Dow tanking more than 550 points Tuesday.
“I don’t think anybody knows how long it will be,” Powell said, referring to the potential economic damage coronavirus could cause. “I know the US economy is strong and we’ll get to the other side of this and return to solid growth and a solid labor market as well.”
Although a rate cut won’t cure infections or fix broken supply chains, “it will help boost household and business confidence,” Powell noted.
The potential damage to the US economy is still an unknown: Powell said any coronavirus-related slowdown would be in a very early stage, although many industries, such as travel and leisure are already reporting losses to their businesses.
The central bank did not discuss any other forms of stimulus, he said. But the market expects the Fed to continue to slash rates to respond to coronavirus: The stock market has priced in a 60% chance of a quarter-point rate cut at the Fed’s meeting in April, according the CME FedWatch Tool.
The emergency rate cut came as somewhat of a surprise: Although the stock market soared Monday in expectation of a rate cut, the Fed and other central banks had seemingly pooh-poohed the notion. Just last week, several Fed officials said it was too early to cut rates in the face of the global virus outbreak. Powell released a statement on Friday saying the central bank would act as appropriate.
The Fed chairman on Tuesday explained the change of heart was because of the continued spread of the disease and a risk to America’s economic outlook.
The G7 released a message Tuesday morning, saying the group of nations would be ready to act if required.
Powell noted that it’s up to individual central banks to determine whether they will act, too, as the United States just did. But he hinted further rate cuts from international central banks could be on the way.
“It’s possible you’ll see more individual action — more action moving forward,” he said.
Investors remained hopeful that the Fed would interject, however. Market expectations for a half-percentage point cut during the March 18 Fed meeting were 100% as of Tuesday morning.
“With financial markets in turmoil and evidence growing that the coronavirus is developing into a pandemic, the Fed’s change of heart is entirely understandable, wrote Paul Ashworth, chief US economist at Capital Economics.
On Monday, the Organization for Economic Cooperation and Development warned that global growth could be cut in half if the outbreak continues to spread. Many of the world’s biggest companies, including Apple and Microsoft, have issued profit and sales warnings in recent weeks because of travel restrictions, factory closures and supply chain issues. Economists are also wondering how consumer behavior will change because of the outbreak. Consumers are the backbone of the US economy.
President Donald Trump, who has long advocated for lower rates, cheered the rate cut but said the Fed needed to cut further.
The-CNN-Wire
By: NBC Palm Springs
March 3, 2020
Latest Instagram Posts
Murder suspect Vicky Kim has once again not been cleared to appear in court. Kim is accused of killing her husband at their Palm Desert condominium complex. Her arraignment has now been delayed three times. Stay tuned with NBC Palm Springs as we track the latest developments in this case. #VickyKim #PalmDesert #CoachellaValley #BreakingNews #CourtUpdate NBCPalmSprings
Palm Springs is mourning the loss of beloved entertainer James “Gypsy” Haake, who has died at 94. Haake began his entertainment career at just 19 years old as a Broadway chorus dancer. After retiring from the stage, he returned to performing at 82, becoming the host of Carnival Cabaret at Oscars in downtown Palm Springs. A longtime friend of our station, Haake was a familiar and beloved figure in the Palm Springs entertainment community — and his contributions were recognized with a star on the Palm Springs Walk of Stars. His career spanned more than seven decades, proving that the spotlight never truly left him. ❤️ Rest in peace, James “Gypsy” Haake. Your legacy will live on in Palm Springs. #JamesGypsyHaake #PalmSprings #PalmSpringsWalkOfStars #CarnivalCabaret #PalmSpringsEntertainment #OscarsPalmSprings #PalmSpringsHistory
Social Time with Thalia & Jerry
Who makes the NBC Top 3, winner will be announced Sunday night on NBC Palm Springs, with the player who makes the number one spot winning a $250 prize from @hondaofthedesert! Comment below if it will be 1) Sterling Conley with the rushing TD, 2) Marcus Kennedy with the touchdown catch, 3) Cade Pinon with the big time sack, 4) Kingston Pellum with the pick-6, or 5) Caleb Hartwell with the saving throw #fypage #fridaynightlights #football #hondaofthedesert #highschoolfootball
James Nellis from @dsrt_club_lq and @rd_rnnr_lq makes us one of his signature dishes, his Maine scallops with hibiscus puree. His creativity and skill lead to unique bold flavors and scrumptious dishes. We chat about his love of trying new things in the kitchen, what being a chef means to him, and how food can different, flavorful, and fun. This is James Nellis on a plate. See it now on nbcpalmsprings.com
At the annual 9/11 Memorial Stair Climb at Morongo Casino Resort & Spa, first responders, families and community members came together to honor the lives lost—and the heroes who answered the call 25 years ago on September 11, 2001. Two first responders who responded to opposite sides of the World Trade Center met for the first time at the event, sharing a powerful moment of remembrance and connection. 26 flights. Three times. One enduring message: Never Forget. #NeverForget #September11 #911Memorial #MemorialStairClimb #FirstResponders HonorAndRemember 911
Palm Desert’s future takes center stage next week. The Palm Desert Area Chamber of Commerce presents the 2026 State of the City Address & Luncheon on Friday, September 18, at the JW Marriott Desert Springs Resort. The event brings together local business leaders, community members and city stakeholders for an inside look at the priorities, opportunities and future of Palm Desert. Friday, September 18 11:30 a.m. – 1:30 p.m. JW Marriott Desert Springs Resort Palm Desert Individual tickets are $85 for Chamber members and $95 for non-members. Get the details and registration information from the Palm Desert Area Chamber of Commerce. #PalmDesert #StateOfTheCity #CoachellaValley #PalmDesertBusiness #GreaterPalmSprings #PalmDesertChamber
25 years later, the memories of 9/11 remain vivid for the firefighters who witnessed the tragedy firsthand. A longtime FDNY firefighter reflects on the trauma, loss and moments that have stayed with him a quarter-century after the attacks. #911 #September11 #NeverForget #FDNY #Firefighter #911Anniversary #25YearsLater #NewYorkCity #Remembering911 #NBCTPalmSprings
A troubling history is coming to light in a Palm Desert husband’s death. 65-year old Vicky Kim is accused in the death of her husband — but prosecutors say she had previously faced several domestic violence cases involving him. The Riverside County District Attorney’s Office says it had secured protective orders against Kim before a judge later resolved her cases as misdemeanors, released her from custody and terminated those orders. Now, Kim is expected to be arraigned in connection with her husband’s death. Court records allege the weapon used was a flagpole.
☕️🔥 How hot is TOO hot? A new study finds that drinking scalding-hot beverages may be linked to nearly 3 times the risk of esophageal cancer—the most common type of cancer affecting the esophagus. The takeaway? Let that coffee, tea or other hot drink cool down before taking a sip. ❤️ #HealthNews #EsophagealCancer #CancerRisk #HotBeverages #Coffee #Tea #CancerAwareness #HealthyHabits #HealthTips