US cuts rates over virus, G7 vows action

By | March 3, 2020

The Fed said it was cutting rates by a half percentage point to a target range of 1.00 to 1.25 per cent on Tuesday. The decision was unanimous.

“The fundamentals of the US economy remain strong. However, the coronavirus poses evolving risks to economic activity,” it said in a statement.

US President Donald Trump said a half point cut was not enough.

The coronavirus has decimated international air traffic and hit sports events, trade exhibitions, concerts, book fairs, prayer meetings and other large gatherings worldwide.

There are almost 91,000 cases globally of which more than 80,000 are in China.

Infections have appeared in 77 other countries and territories, with Ukraine the latest to report its first case.

China’s death toll was 2943, with more than 125 fatalities elsewhere.

Finance ministers from the G7 group of wealthy countries were ready to take action, including fiscal measures where appropriate, Japanese Finance Minister Taro Aso said.

Central banks would continue to support price stability and economic growth.

“We reaffirmed our commitment to adopt all appropriate policy steps to protect the economy from downside risks posed by the coronavirus, and that we stand ready to co-operate further on timely and effective measures,” Aso told reporters after a G7 call.

Global stock markets seesawed in volatile trade and gold prices rose more than two per cent after the Fed move.

Shares in Europe rose to trade more than two per cent higher on the day.

About 3.4 per cent of reported coronavirus patients have died, World Health Organisation chief Tedros Adhanom Ghebreyesus said in Geneva.

As a percentage, seasonal flu, which infects hundreds of thousands each year worldwide, kills far fewer.

But the coronavirus outbreak, also known as COVID-19, could be controlled, he said.

“To summarise, COVID-19 spreads less efficiently than flu, transmission does not appear to be driven by people who are not sick, it causes more severe illness than flu, there are not yet any vaccines or therapeutics, and it can be contained.”

The worst outbreak outside China is in South Korea, where President Moon Jae-in declared war on the virus, ordering additional hospital beds and more masks as cases rose by 600 to nearly 5000, with 34 deaths.

In the US, six people have died in an outbreak in Seattle.

The US Centers for Disease Control and Prevention lists more than 90 cases nationwide, many of them patients repatriated from the Diamond Princess cruise liner that was quarantined in Japan.

Iran has had 77 deaths, the highest number outside China, and 2336 confirmed infections, the health ministry said on Tuesday.

The death toll in Italy, Europe’s worst-affected country, jumped to 79 on Tuesday and the number of confirmed cases passed 2500. France reported its fourth coronavirus death.

Western Advocate – Health