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Here's why US Federal Reserve's interest rate cut matters to Ireland

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Taking action: The Federal Reserve, led by chairman Jerome Powell, has cut interest rates

Taking action: The Federal Reserve, led by chairman Jerome Powell, has cut interest rates

REUTERS

Taking action: The Federal Reserve, led by chairman Jerome Powell, has cut interest rates

The US Federal Reserve stepped in with a large rate cut yesterday, its first outside its normal schedule of meetings since the Lehman crisis erupted in 2008 and plunged the world, Ireland included, into the worst recession since the 1930s.

Since that time, our reliance on the world's big central banks - the Fed, European Central Bank, Bank of Japan and Bank of England - has only increased and they have bought somewhere in the region of €14 trillion of government bonds, so it was more a question of when rather than if they would step in.

Yesterday's cut saw the federal funds rate at the world's most important central bank reduced by half a percentage point to a range of 1.0 to 1.25pc, as it took measures to deal with "evolving risks to economic activity" posed by the spread of the coronavirus.