Blackstone CEO Stephen Schwarzman said it “remained unclear” if the Fed can restore economic confidence following the coronavirus outbreak. The Federal Reserve slashed interest rates by 50 basis points on Tuesday. Fed Chair Jerome Powell is attempting to reduce economic fallout due to the spread of the virus. However, the Dow still shed more than 700 points after the rate cut.

Blackstone CEO Stephen Schwarzman on the Fed

Stephen Schwarzman said it will still be a while before we know if the Fed’s gambit will work.

“It’s unclear whether that response will re-establish confidence because the confidence is really about the disease and not about the financial markets per se,” he said during a talk in Mumbai.

Schwarzman isn’t the only voice raising concerns about the Fed. President Donald Trump said Tuesday that the Fed must continue easing. “We are not playing on a level field,” Trump tweeted. “Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!”

Meanwhile, former Treasury Secretary Larry Summers has also criticized the Fed for its preemptive action. Summers said that the central bank risks “scaring people” with its interest rate cut. “When you have limited ammunition you have to conserve it,” Summers said. “The Fed has limited ammunition with interest rates so low. Interest rates don’t cure the #coronavirus and interest rates don’t repair supply chains.”

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