Finance ministers and central bankers from the Group of Seven leading industrialized nations (G7) promised Tuesday to "closely monitor" financial market developments amid the coronavirus crisis but stopped short of offering new financial stimulus or cuts to interest rates.
In a statement released following an emergency conference call among the G7 members, co-chaired by U.S. Treasury Secretary Steve Mnuchin and Federal Reserve Chairman Jerome Powell, the leaders said they "stand ready to cooperate further on timely and effective measures," including fiscal tools, but made no mention of interest rate reductions.
"Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks," reads the statement. "Alongside strengthening efforts to expand health services, G7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase."
The lack of clarity on coordinated rate cuts sent stock markets lower. U.S. equity futures suggest a 244-point decline for the Dow Jones Industrial Average when markets open Tuesday, and a 26-point pullback for the S&P 500 at the start of trading.
Coronavirus cases have been accelerating at a rate that is eight times faster outside of China -- the epicenter of the outbreak -- than inside, with the number of non-China infections now estimated at nearly 11,000 worldwide.
Australia’s central bank cut its key lending rate to a record low 0.5% overnight in an effort to ensure that China's impending slowdown from the virus will have a limited impact on its domestic economy.
