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Fed cuts rates to zero, agrees to buy more bonds


The Federal Reserve unleased much of its arsenal Sunday to combat the economic damage caused by the coronavirus, cutting short-term interest rates to zero, renewing its crisis-era bond purchases to lower long-term rates and encouraging more bank loans to households and businesses.

Central bank policymakers agreed to lower the Fed’s benchmark federal funds rate by a full percentage point to a range of zero to 0.25% — where it hovered for years during and after the 2008 financial crisis.

“The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the Fed said in a statement. ““The effects of the coronavirus will weigh on economic activity in the near-term and pose risks to the economic outlook.“

The Fed already had cut its key rate by half percentage point earlier this month. Many economists expected the central bank to agree to a percentage point cut at a two-day meeting that ends Wednesday, but the Fed decided to move early in a historic show of force.



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