Fed Cuts Benchmark Interest Rate By Half-Point To Offset Virus

WASHINGTON (AP) — US Federal Reserve cuts benchmark interest rate by half-point, most since 2008, to offset coronavirus impact.

Fed Chair Jerome Powell said Tuesday that the coronavirus “poses evolving risks to economic activity.” The Fed’s statement Tuesday also said that it is “closely monitoring developments.”

The Dow, which had fallen sharply after the opening bell, swung almost 700 points into positive territory after the Fed announcement.

Seven major economies earlier pledged to use “all appropriate tools” to deal with the spreading coronavirus but announced no immediate actions.

The group of major industrial countries, referred to as the G-7, said Tuesday that it was “ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy.”

The joint statement from the United States, Japan, Germany, Britain, France, Italy and Canada was issued after an emergency conference call among the finance ministers and central bank presidents, led by U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell.

The G-7 has issued similar joint statements during periods of extreme market turmoil, such as the Sept. 11, 2001, terrorist attacks and the 2008 financial crisis.