Definition
A rate cut announced between scheduled Fed meetings, typically during a crisis or market stress.
The story
In March 2020, as the COVID-19 (coronavirus disease 2019) pandemic spread, the Fed cut rates twice outside its regular schedule: by half a point on March 3 and by a full point to near zero on March 15. Unscheduled moves are rare, so when they happen they signal serious concern.
Why markets watch it
Talk of an emergency cut is itself a sign of stress in markets.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms