"The fundamentals of the US economy remain strong," the statement said. "However, the coronavirus poses evolving risks to economic activity. 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 by 1/2 percentage point, to 1 to 1–1/4 percent."
The Federal Reserve also said the "Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy."
The move came after President Donald Trump renewed criticism of the Federal Reserve for being slow to cut interest rates and after the US stock market suffered its worst weekly drop since on fears over the coronavirus’ economic impact.
The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!— Donald J. Trump (@realDonaldTrump) March 3, 2020
Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so. Our Federal Reserve has us....— Donald J. Trump (@realDonaldTrump) March 3, 2020
Shortly after the Federal Reserve’s statement, US stocks turned positive, with the broad Dow Jones Industrial Average index rising 0.8 percent by 10:30 a.m. EST (3:30 p.m. GMT).
As US stocks plunged about 16 percent on the week last Friday, Federal Reserve Chair Jay Powell said they were monitoring the novel coronavirus crisis to determine appropriate action.