CNBC Economy

The number of Americans filing for unemployment benefits fell last week, suggesting the labor market was on solid footing despite the coronavirus outbreak, which has stoked financial market fears of a recession and prompted an emergency interest rate cut from the Federal Reserve.

U.S. productivity in the fourth quarter was seen rising by 1.4%, in line with the prior reading.

The report came a day after the Fed slashed its benchmark overnight interest rate by a half percentage point to a target range of 1.00% to 1.25%, in the U.S. central bank's first emergency rate cut since 2008 at the height of the financial crisis.

U.S. Federal Reserve policymakers are unmoved by political pressure, according to Cleveland Fed President and CEO Loretta Mester.

Employment rose by 183,000 for the month, according to a report Wednesday from Moody's Analytics that topped the 155,000 that economists surveyed by Dow Jones expected.

Other major central banks have scheduled meetings in the coming weeks and could follow the Fed's lead.

No sooner had the central bank announced the reduction than market participants began speculating about what was next.

Markets had been widely expecting the U.S. central bank to take some type of action, with anticipation of a 50 basis point cut by the next Federal Open Market Committee meeting later this month.

"It's great that the Federal Reserve recognizes that there's going to be weakness, but it makes me feel, wow, the weakness must be much more than I thought," CNBC's Jim Cramer said.

The Australian central bank cut rates to record lows and noted the impact of the coronavirus outbreak.

"The magnitude and persistence of the overall effect on the U.S. economy remain highly uncertain and the situation remains a fluid one," he said.

President Donald Trump on Tuesday demanded that the Federal Reserve cut rates even more after the central bank announced it would slash rates by 50 basis points in an effort to combat the economic impact of the coronavirus outbreak.

Goldman's Jan Hatzius said on CNBC's "Closing Bell" that the world economy would likely shrink for "a quarter or so" but rebound before officially becoming a recession.

Stephen Roach, who served as Morgan Stanley's chief economist, said that the U.S. government's response to the outbreak has been "flailing" and that it needed to make investments in public health.

Federal Reserve Chair Jerome Powell is holding a brief news conference following the surprise rate cut on Tuesday.

"We reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks," the G-7 statement said.

The G-7 will voice their determination to fight the economic hit of the coronavirus but stop short of directly calling for new government spending or coordinated central bank interest rate cuts, two G-7 officials said on Tuesday.

Global financial ministers and central bankers will hold a conference call on Tuesday to coordinate the financial and economic response to the coronavirus.

As short-term rates keep going lower, there's a chance they could go all the way to near zero where they were during the financial crisis.

With fears over a global slowdown intensifying, the Fed likely will announce a 50 basis point cut at its March meeting, if not sooner, the firm said.