Will central banks follow the Fed’s lead and cut rates? – The National

Will central banks follow the Fed’s lead and cut rates? – The National

The last two weeks has seen markets abruptly catch up with the reality of the coronavirus crisis, with bond and equity markets forcing the US Federal Reserve's hand to cut interest rates suddenly.. The Fed cut interest rates by 50 basis points in an emergency move bringing the lower bound of the rate to 1.0 per cent.. It was quickly apparent that markets were not satisfied with the Fed's move as equity markets and bond yields continued to fall.. Fed chairman Jerome Powell said the central bank took action after officials saw the coronavirus outbreak was having a material impact on the economic outlook.. The Reserve Bank of Australia and the Bank of Canada were the only other prominent central banks to make similar moves to the Fed and the markets are awaiting decisions from the Bank of England and the European Central Bank (ECB) in the coming weeks.. Expectations are that the Fed will cut interest rates again at their next meeting on March 17 to 18, and perhaps once again after that.. It could also leave the Fed dangerously exposed should the economic situation begin to really deteriorate, as it would leave the lower bound of US interest