In a move in which the timing was more compelling than the decision itself, the Federal Reserve (Fed) announced this morning that it unanimously decided to cut its policy rate by 50 basis points (0.5%) from the 1.5-1.75% range to the 1-1.25% range. The surprise move marked the Fed’s first rate action outside of a regularly scheduled meeting since October 2008.
As concerns over the impact of the coronavirus on global economies and markets have intensified, investors’ expectations of policy stimulus increased dramatically. “The Fed’s perspective on the evolving crisis has changed quickly,” said LPL Financial Senior Market Strategist Ryan Detrick. “Even after the emergency action, the bond market is still pricing in more cuts by July.”