Will A Rate Cut Help Save The Fed From The Coronavirus ?

According to Yahoo News the Federal Reserve shocked all of the financial markets by slashing interest rates by 50 basis points.

“The Jerome Powell-led Fed shocked Wall Street by slashing interest rates by 50 basis points around 10:00 a.m. ET. The Fed said the “fundamentals of the U.S. economy remain strong” but that the coronavirus “poses evolving risks to economic activity.”

Stocks initially popped on news of the cut, but quickly gave up gains as investors rallied around a notion the Fed is perhaps seeing recessionary conditions emerge in the U.S. due to coronavirus. The Dow Jones Industrial Average plunged nearly 800 points by the closing bell. Meanwhile, the Nasdaq Composite and S&P 500 fell 2.8% and 2.9%, respectively.” – Source

While it’s certain in the short run this helped stocks for a number of hours the reality is the US may be facing a natural recession after years of consistent growth. Now with the coronavirus nipping at the heals of the US Economy it’s certain the Federal Reserve is trying to stave off a hungry dog. It’s uncertain if it’s enough to keep away the entire pack of recession dogs.