Tuesday 10 March 2020 4:17 pm

Donald Trump brands Fed ‘pathetic’ after US stocks’ coronavirus bloodbath

US President Donald Trump has labelled his country’s central bank “pathetic” for not cutting interest rates further in the face of the coronavirus outbreak, which sent stocks plunging yesterday.

Trump’s intervention adds to the pressure on the US Federal Reserve to cut rates again after it slashed them by 50 basis points (0.5 percentage points) in an emergency move last week.

Read more: Coronavirus: FTSE 100 falters as European stocks fall back

Trump tweeted: “Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations.”

He added: “The Federal Reserve must be a leader, not a very late follower, which it has been!”

Worries over the economic impact of coronavirus combined with an oil-price crash to send global stock markets to their worst day since the financial crisis yesterday. Wall Street’s S&P 500 plummeted 7.6 per cent yesterday, while the Dow Jones finished 7.7 per cent lower.

A semblance of calm has returned to US stock markets today, although an early bounce has petered out. The S&P 500 was last up one per cent.

The mild rebound came as traders bet central banks around the world will stimulate their economies by cutting interest rates and perhaps ramping up their bond-buying programmes.

Investors now think there is a 78 per cent chance the Fed will slash rates by 75 basis points at its meeting next Wednesday. This would take the central bank’s target rate to between 0.25 and 0.5 per cent.

Analysts at UBS said: “We expect further cuts in policy rates and an expansion of central bank balance sheets across major economies including the US, UK, Eurozone and Japan in the coming days.”

They warned that the US economy – as one of the world’s biggest oil producers – is particularly vulnerable to the drop in global oil prices, which has been driven by a spat between Saudi Arabia and Russia.

Yet UBS said monetary policy had to be backed up by fiscal spending to be effective.

Read more: Federal Reserve slashes interest rates over coronavirus fears

Part of the reason the US stock rally faded today was that the White House failed to announce the spending plans that Trump trailed yesterday.

Trump had said he would discuss with Republican lawmakers a “very substantial” payroll tax cut, but little has materialised today.