Politicians must stop expecting central bankers to rescue the economy

Fed's interest rate cut backfired as coronavirus panicked markets

William Pesek

March 5, 2020 03:00 JST

20200304 Shinzo Abe budget committee.jpg

Shinzo Abe attends a House of Councillors Budget Committee session on Mar. 3: why engage in messy reforms when the monetary lever is so much easier? © Kyodo

On Tuesday, in the throes of market panic about the economic consequences of the coronavirus, the U.S. Federal Reserve pulled a rare surprise: it made an emergency 0.5% cut in interest rates, taking its benchmark rate to 1%-1.25%.