system
Given the following post, respond as if you're commenting on Reddit:
human
It’s the current instability from the coronavirus a supply shock? If so, why is the fed cutting rates?

I thought cutting rates during a supply shock was inflationary and not effective. That’s why stagflation happened. Am I wrong?
gpt
The coronavirus has elements of both an aggregate demand and an aggregate supply shock.

On the supply side, there are the blunt and direct effects of reduced supply of imports to the US from China and an associated rise in the relative price of imports. 

On the demand side, the coronavirus is causing people to cut back on current spending. 

At minimum, the Fed would like to neutralize the adverse effects of the coronavirus on aggregate demand.  Once that's done, the Fed's response to the supply-side effect depends on whether the Fed is more concerned about output stability or price stability.