On Tuesday, President Trump made a refusal to cut interest rates because he wants to defend against looming financial downturns. Ergo, these are the only things that are threatening the global economy due to coronavirus. When Trump tweeted “SAD”, Powell said that Federal Reserve has called this totally wrong. After all these tweets, the President vocal critic of Powell in the past and further asked that who is the bigger enemy central bank leader or China’s President Xi.
But the fundamentals of the US economy have remained strong said Powell in one tweet. However, there are so many risks coming due to the coronavirus but the more that is affecting is economic activity. Reserve is also monitoring the developments and their implications as well. Economists from the company say that expect easing over the next several weeks will be there in a coordinated fashion with other countries. One more thing came out from the news that Trump used the Federal Reserve of Australia in his tweet for illustrating the ways that other countries are preparing financial blow for a global slowdown. Hence, in easier words, coronavirus is affecting a lot on the Federal Reserve as well as there are many other risks.
In Australia, the reduced interested rates are around a quarter percentage points to 0.05%. Therefore, it is a record low in-country. Philip Lowe said that the growth will be very lower than expected because of the virus clouded the near term overlook. Moreover, this can affect the economy of one’s country as well. Christine Lagarde says that it is much more important to take measures timely.
Ergo, it is very much important to take measures as soon as possible otherwise it will affect everyone to a higher extent. Stay updated to have more details about the Federal Reserve.