CNN: The Fed just hit the coronavirus panic button

Article published: March 3, 2020

IB Economics syllabus: Macroeconomics (expansionary monetary policy)

It seems like the coronavirus has effects other than on hockey sticks, in fact now the Fed (the U.S. Central Bank) has also reacted to it. In fears of a fall in economic growth (not to mention, a recession…) the Fed has cut the interest rate by a surprise move today by 0.5%. What’s interesting, is that such a sudden (there was no meeting scheduled), and such a large cut has not occured since the Financial Crisis (actually, since 2008). A great article to analyze Central Bank intervention (expansionary monetary policy).

Source of image: Unsplash.com

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