President Trump has finally got his way bullying the Federal Reserve bank into a ½% rate cut in the US, after consistently beating the Federal Reserve Chairman, Jerome H. Powell with a big stick for not cutting earlier. The coronavirus is taking the blame for the reduction, with markets looking for a further 1/4pct cut in the next few months, over an anticipated slowing in global trade and weaker economin activity.
UK reaction
After strong signals from the Bank of England, market watchers were already looking for an early cut in UK base rates but maybe not as aggressive as in the US, a ¼% is most likely. The probability of a cut is now very high, potentially this week but with the proximity to the budget on March 11th could be announced as part of the budget, alongside a raft of other economic measures designed to cope with Brexit AND the new coronavirus threat to economies the world over.