On Tuesday, the 03 of March 2020, the US Fed went in for an emergency rate cut of 50 bps. Now, emergency rate cuts are nothing new for the US Fed. They did it three times in 2001 and another three times during the Lehmann crisis. However, this was after a gap of nearly 12 years. Of course, this was to combat the aftermath of the virus. Clearly, the US Fed was worried by the rapid spread of the virus pandemic and also the impact on the US economy. From falling demand for cars and luxury goods to disruption in supply chain of raw materials; China was impacting the world economy at a rapid pace. The 50 basis points cut was to arrest this trend. One can question the urgency but the purpose was clearly twofold. Firstly, the US runs a huge trade deficit with China which feeds the US supply chain in a big way. Secondly, the US yield curve had repeatedly inverted with the 3 year yield going above the 5-year yield. This had raised the fears of deflation and the Fed needed to build confidence among businesses and consumers.