By Tom Burnett CFA
On March 3, 2020, the Federal Reserve’s Open Market Committee decided unanimously to lower the Fed Funds range to 1-1.25%, down 50 basis points from the previous level. The Fed’s press release indicated that it is ‘closely monitoring’ the economic impact of the coronavirus outbreak. The Fed also made it clear that it would take all ‘appropriate’ action to support the economy. In a formal press conference, Fed Chairman Powell repeated his belief that the underlying economy and employment situation remain strong and that the Fed is acting to promote continued investment and spending through a lower interest rate environment.
Following the announcement, the fixed-income market traded in a mixed fashion with the 30-year bond yield rising slightly to 1.65%, while the 10-year Note yield declined to 1.05%, a record low level.
Tom Burnett CFA is Director of Research