Coronavirus: Fed Cuts Rates, ECB Ready To Take Measures

Fed Chairman Jerome Powell

Fed Chairman Jerome Powell answers a reporter's question at the March 3, 2020 press conference.

Prince Albert told French media Monaco-Matin on Monday that any further coronavirus cases in Monaco will be treated at Princess Grace Hospital Center or hospitalized at home instead of being sent to Archet hospital in Nice.

“Above all, you must not give in to panic or to excessive worry,” he emphasized. “The situation is completely unusual, it’s true, we are directly affected and we will probably have other cases of infected people.”

More than 90,000 people worldwide— counting 10 in the Alpes-Maritimes, including a three-year-old girl in isolation at the Lenval Foundation in Nice—have contracted coronavirus and 3,117 have died.

The Covid-19 epidemic has raised fears of a slowdown in global growth over the coming months, and financial institutions, including the Federal Reserve, have started to react.

On Tuesday, March 3, in an unexpected move, the U.S. Central Bank cut rates by 0.5 percentage points with federal-funds rate now ranging from 1% to 1.25%. It was the first unscheduled emergency rate cut since the 2008 financial crisis.

“The virus and measures being taken to contain it will weigh on economic activity here and abroad for some time,” Fed Chairman Jerome Powell said at press conference on Tuesday.

President Donald Trump tweeted: “The Fed has lowered its rates but it must go further and, above all, it must align with the other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!”

The president was referring to the Reserve Bank of Australia, who earlier Tuesday cut interest rates to a record 0.5% low in order to make up for China’s coronavirus slowdown.

The Bank of Canada is also expected to announce rate cuts following a policy meeting Wednesday.

In Europe, European Central Bank President Christine Lagarde said on Monday that the epidemic posed “risks to the economic outlook and the functioning of financial markets.” The ECB says it is “ready to take appropriate and targeted measures, if necessary, and proportionate to the underlying risks.”

Following a “very postive” call with Legarde on Tuesday, French minister for the economy, Bruno Le Maire, tweeted, “"We want a strong and coordinated response at the level of the euro zone and the G7.”

EU finance ministers are scheduled to meet on March 12.