Was the Fed's Emergency Rate Cut Irresponsible?

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The Federal Reserve, in a shocking move, held an emergency meeting and announced a rate cut of 50 basis points on Tuesday, March 3.

The surprise decision was designed to cushion the economic impact of the coronavirus. It came just hours after a meeting of G-7 finance ministers and central bankers.

"My colleagues and I took this action to help the U.S. economy keep strong in the face of new risks to the economic outlook," said Powell, who added that "the fundamentals of the U.S. economy remain strong."

But the rate cut, which came at 10 a.m. Eastern, just 30 minutes after the markets opened, may come off to some as irresponsible given the G-7 leaders' decision to "stand ready."

Steve Skancke, chief economic advisor at Keel Point, said that the Fed expected the market to react poorly to the G-7's lack of action, which led the Fed to "seize the moment" and try to head off a "down market debacle."

Watch the full video for more.

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