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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 | Coronavirus | US Fed rates


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 ...

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First Published: Fri, February 28 2020. 03:16 IST