Investors weighed the jolt the US economy could get from the Fed’s stimulus with the message the stunning rate cut sends: The US economy could be in trouble because of coronavirus.
The unscheduled rate cut — the first since the financial crisis — came as investors worried about the spread of the novel coronavirus and the growing risk to the global economy. Market expectations for an interest rate cut at the Fed’s March 18 meeting had been at 100% at the market open Monday, even though Fed officials spoke out last week against cutting interest rates right away.
Wall Street rallied Monday on hopes that central banks would inject stimulus. The rebound rally that ensued brought the Dow its biggest point-gain in history as stocks bounced back from their worst week since the financial crisis.