Business Standard

Federal Reserve seen slashing rates amid coronavirus threat, low inflation

Global central bankers, facing an economic threat from the virus, have for the most part taken a wait-and-see approach

US federal reserve
Premium

US Federal Reserve

Reuters
The Federal Reserve may need to move aggressively to cut borrowing costs to cushion the economy from the rapid spread of the new coronavirus, in part because interest rates are already low and so is inflation.

Traders of futures contracts tied to the U.S. central bank’s policy rate are already betting on it. On Thursday they were pricing in about a 54% chance of the Fed starting to cut rates as soon as next month and trimming an extraordinary three-fourths of a percentage point by September, according to CME Group’s FedWatch.

That would bring the short-term target rate to below 1% for

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Feb 28 2020 | 3:16 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com