The US Federal Reserve has slashed interest rates to mitigate the damage COVID-19 is wreaking on the world economy, as global health chiefs said that supplies of essential protective gear were shrinking rapidly.
However, the Fed’s unusual sudden stimulus had the opposite effect on Wall Street, with stocks sliding as investors took the move as a signal the virus looked set to do real damage.
The disease, which first emerged in China, is appearing in new countries almost every day, with Iran and South Korea particular hotspots.
Italy is also a growing worry, as the death toll rose to 79 on Tuesday, with more than 2,500 people infected.
One bright spot has been China’s apparent progress in slowing the epidemic, with official figures yesterday showing new cases falling for a third straight day.
China reported 38 more deaths yesterday, but only 119 new cases, its lowest number since January, with most infections in Hubei Province, where the virus was first detected.
More than 90,000 people have been infected and about 3,200 have died worldwide.
The vast majority of cases and fatalities have been in China, but infections are rising faster outside China now, prompting more extraordinary measures, with France closing dozens of schools, Nigeria’s parliament shutting down for two weeks, the IMF and World Bank shifting a meeting to a “virtual format.”
In a sign of official disquiet, the Fed’s policy-setting committee slashed its key interest rate by half a point to a range of 1 percent to 1.25 percent — the first between-meeting cut since the height of the 2008 financial crisis.
“My colleagues and I took this action to help the US economy keep strong in the face of new risks to the economic outlook,” Fed Chair Jerome Powell told reporters.
However, the move failed to impress investors on Wall Street, with the Dow Jones Industrial Average finishing nearly 3 percent lower.
“The Fed’s emergency rate cut was supposed to boost confidence, but it may wind up raising fears that the coronavirus is likely to cause a major economic downturn,” economist Joel Naroff said.
The WHO voiced concern that masks, goggles and other protective equipment used by health workers were running out due to “rising demand, hoarding and misuse.”
“We can’t stop COVID-19 without protecting our health workers,” WHO Director-General Tedros Adhanom Ghebreyesus told reporters in Geneva, Switzerland, adding that prices of masks have surged sixfold and the cost of ventilators has tripled.
Tedros said the WHO had shipped more than 500,000 sets of personal protective equipment to 27 countries, but warned that “supplies are rapidly depleting.”
French President Emmanuel Macron said that his government would requisition all mask stocks and production in the coming months in response to the outbreak, after 2,000 masks were stolen from a hospital.
Indonesian police seized more than 500,000 masks from a Jakarta-area warehouse after the country’s first confirmed cases of coronavirus sparked panic buying and sent prices for prevention products skyrocketing.
There are now 2,981 deaths in China and more than 80,000 cases.
In Europe, attention turned to containment, including Switzerland, where all soldiers were confined to their bases after a case of the virus was discovered in their ranks.
The number of confirmed cases in Germany increased to 240 yesterday, up from 196 on Tuesday afternoon, the Robert Koch Institute (RKI) said.
Fifteen of Germany’s 16 federal states have now reported cases of the novel coronavirus, with the western state of North Rhine-Westphalia being most affected, the RKI said.
Germany has not reported a fatal case of the virus.
Additional reporting by Reuters
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