The U.S. Federal Reserve has issued an emergency rate cut of a half-percentage point. The coronavirus was cited as the major reason behind the move. The Fed last took a similar step in 2008.
"The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity," according to the Fed. "In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1‑1/4 percent."
The decision to make the emergency rate cut was unanimous and could have a domino effect on mortgage rates.
"Variable rates usually move in the same direction as the federal funds rate," according to Bankrate. "The federal funds rate, however, doesn’t directly affect long-term rates, which include financial products like 30-year fixed-rate mortgages; those tend to move with long-term Treasury yields."
To learn more about these recent rate cuts, click here.