MMF Opportunity in Volatile Markets


The U.S. Federal Reserve cut its short-term benchmark rate by 50 basis points (bps) on March 3, to a range of 1.0 percent to 1.25 percent, following an off-schedule meeting that caught many market participants by surprise. It was the Fed’s first unscheduled cut since the financial crisis. And many analysts expect an additional rate cut at next week’s scheduled policy meeting.

Last week’s move was uncharacteristically preemptive, designed to buoy markets before the full impact of the coronavirus could be felt on U.S. and global markets. Unlike this cut, reductions in 2008 and after the September 11 attacks in 2001 were reactive. In its commentary issued on March 5, Fidelity Investments explains:


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