The U.S. Federal Reserve announced a surprise rate cut of half a percentage point on Tuesday in an effort to mitigate the economic fallout of the novel coronavirus outbreak on the U.S. economy.

The Fed said in a statement that its Federal Open Market Committee(FOMC) decided to slash the benchmark rate by 50 basis points and lower the target range to one to one-point-25 percent. 

The statement said the fundamentals of the U.S. economy remain strong, but the coronavirus poses evolving risks to economic activity. It added that the Fed decided to lower the rate in light of these risks and in support of achieving its maximum employment and price stability goals. 

The unexpected rate cut, which came ahead of the FOMC's regular meeting set for March 18, is the first since last October.