U.S. stocks plummeted Tuesday after the Federal Reserve’s emergency rate cut failed to bring calm, extending the mayhem that has defined the markets for days over growing concerns the coronavirus will blunt economic growth.
The Dow Jones industrial average sank more than 3 percent, nearly 1,000 points, and the yield on the U.S. 10-year Treasury bond — a foundation of global finance — fell below 1 percent as investors fled equities for the safety of bonds. Investors are worried that the spreading outbreak will upend the global economy and end the decade-long expansion.
The Fed, whose leaders were unanimous in their decision to bring the rate to just below 1.25 percent, had not taken such an emergency step since 2008. The announcement came after the Group of Seven failed to offer a specific course to combat the economic fallout from the outbreak, which has upended global supply chains since the first cases emerged in Wuhan, China, in December.
Vanguard Group, a mutual fund giant, called the cut premature, saying there was a lack of data to prove there was a drag on the economy, and suggested the rate cut could send the wrong message to individual and group market participants.
See WaPo for more.