Breaking: Fed cuts policy rate by 50 basis points to 1%-1.25% in emergency move, stocks surge
|The US Federal Reserve has announced that it cut its policy rate by 50 basis points to the range of 1%-1.25% in an emergency move to help the economy stay resilient against the negative impact of the coronavirus outbreak.
"The fundamentals of the US economy remain strong. However, the coronavirus poses evolving risks to economic activity," the Fed explained 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."
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Market reaction
With the initial market reaction, the USD came under strong selling pressure and dragged the US Dollar Index to 97.20 area.
As of writing, the EUR/USD pair was up 0.4% on the day at 1.1175, the GBP/USD pair was adding 0.5% on the day at 1.2817 while the USD/JPY was erasing 0.6% at 107.70.
Additionally, Wall Street's main indexes gained traction and were last up between 0.7% and 0.9%.
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