Weekly economic review & outlook
Fed cuts rates with little near-term impact
March 09, 2020
You Need to Know
Week in review
Declining interest rates and stock price volatility continue
A surprise interest rate cut from the Fed did little to ease market concerns about the economic impact of the coronavirus.
Payroll gains strong in February
Nonfarm payrolls jumped by 273,000, with large upward revisions to prior months, but this was yet another pre-virus reading.
CPI growth positive, but held back by drop in energy prices
CPI inflation for February is expected to edge up a tad, held back by declining energy prices for a second straight month.
Consumer sentiment should fall as virus fears spread
Consumer sentiment is projected to take the first hit from the coronavirus as continued news of outbreaks threaten to decrease optimism on the state of the economy.
Counter to previous “watchful waiting” comments, the Federal Reserve reacted quickly and decisively to the sharp tightening of financial conditions and the growing risk to the U.S. economy from the coronavirus. In its first intermeeting rate change since early in the financial crisis, the FOMC cut the federal funds rate by 50 basis points (bps) on March 3 while promising to take further steps, as necessary, to keep liquidity flowing to the economy.