The Federal Reserve unexpectedly cut interest rates in an effort to reduce the negative impact of the coronavirus outbreak on the US economy. Global markets were anticipating that day when the world’s leading regulator would take action. Considering the fact that, under current circumstances, the Fed has a limited number of tools, market participants were not surprised when the regulator eased interest rates. According to experts, the main reason for the Fed’s action was fear that the novel coronavirus outbreak could spread further. As expected, the US dollar fell against the euro and the yen. However, in general terms, the greenback was rather stable. Federal Reserve Chair Jerome Powell announced that the central bank is closely monitoring developments of the coronavirus and is ready to use any tools to support the economy. Therefore, the stimulus measure taken by the Fed was in line with expectations of the financial market.
