Geo-political news
COVID-19 – Coronavirus cases near 100,000 confirmed cases milestone with more than 98,000 reported by Thursday. Dr Tedros Adhanom Ghebreyesus, director general of the World Health Organisation says “now is the time to act” as efforts to combat the coronavirus within developed economies have appear to lag. The UK reported its first death this week as confirmed cases grow to 115. President Donald Trump has admitted the coronavirus “might have an impact” on the US economy, something he had previously downplayed. This comes on the back of news that US stocks were crushed on Thursday, significantly reducing the gains seen mid – week. Countries continue to point fingers at one and other, complaining about tit – for – tat travel restrictions that continue to be imposed.
Federal Reserve rate cut – In a unanimous vote, the Federal Reserve’s Open Market Committee announced they had cut the main policy rate by half a percentage point on Thursday, down to 1.25%, due to on-going coronavirus concerns. They added that the spread of the disease “poses evolving risks to economic activity” but stated that US economic fundamentals remain strong. The interest rate cut came as the G7 finance ministers and central bank governors pledged to take all appropriate policy tools to maintain global economic health, which prompted the Bank of Canada to cut their interest rate to 1.25% from 1.75%, and the Reserve Bank of Australia to cut their interest rate to a record low of 0.50%.
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