Fed cuts interest rate by half a percentage point amid coronavirus fears

[mystery-ak]

Fed cuts interest rate by half a percentage point amid coronavirus fears
By Sylvan Lane - 03/03/20 10:09 AM EST

The Federal Reserve on Tuesday cut interest rates amid concern about the potential economic toll of the coronavirus outbreak.

The Federal Open Market Committee (FOMC), which sets Fed interest rates, announced it would cut its baseline interest rate range by 0.5 percentage points to a 1 to 1.25 percent spread.

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” the FOMC said Tuesday in a statement. “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.”

more
https://thehill.com/policy/finance/485656-fed-cuts-interest-rate-by-half-a-percentage-point

[libertybele]

The market reaction -- down over 400 pts. so far

[corbe]

[IsailedawayfromFR]

With this move, I would say a number of companies will find it harder to continue funding a high dividend payout, so look for reductions in dividend paying stocks.

Yields there will still be much higher than the bond market, so investors will likely stay put.