Source: Statista

In an attempt to contain the economic fallout of the coronavirus outbreak before things get worse, the Federal Reserve cut the federal funds rate by 0.5 percent to a target range of 1.00 to 1.25 percent on Wednesday. The unanimous decision by the Federal Open Market Committee marks the first emergency rate cut and the biggest one-time cut since 2008, when the financial crisis was in full force.

While pointing out that the fundamentals of the U.S. economy remain strong, the Federal reserve Chair Jerome H. Powell stated that “the coronavirus poses evolving risks to economic activity,” adding that the FOMC’s decision was made “in light of these risks and in support of achieving its maximum employment and price stability goals.”

While President Trump, a long-time critic of the Fed’s cautious approach to monetary policy, was quick to call for even deeper cuts, others argued against the emergency decision, saying that it only added to the panic that had sparked the worst stock market selloff in years last week. Markets didn’t exactly rally after Tuesday’s announcement, as the S&P 500, the Dow and the Nasdaq fell between 2.81 and 2.99 percent, undoing some of Monday’s market recovery.