Fed cuts interest rates to zero percent amid coronavirus fallout

by SYLVAN LANE - The Hill
March 16, 2020

The Federal Reserve on Sunday slashed interest rates to zero percent and announced it would purchase $700 billion in bonds and securities to stabilize financial markets and support the economy.

The Federal Open Market Committee (FOMC), the Fed’s monetary policymaking panel, announced Sunday it would cut its baseline interest rate range to 0 to 0.25 percent, drastically increase purchases of Treasury bonds and mortgage-backed securities, and take several other steps to allow banks, businesses and households to weather a sharp economic downturn.

“The actions we have announced today will help American families and businesses in our entire economy weather this difficult period and will foster a more vigorous return to normal once the disruptions from the current coronavirus abate,” said Federal Reserve Chairman Jerome Powell during a Sunday conference call with reporters.

The sudden rate cut and push to flood the Treasury bond market with liquidity comes as the coronavirus pandemic forces businesses across the U.S. and world to shutter, likely plunging the global economy into a recession.

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