FED Cut Interest Rates To Zero
The US Federal Reserve slashed rates back to near zero, restarted bond buying and joined with other central banks to ensure liquidity in dollar lending to help put a floor under a rapidly disintegrating global economy during the escalating coronavirus pandemic.
And in a dramatic move that underscored the depth of the economic threat as businesses shutter and potentially millions of jobs evaporate, the Fed encouraged banks to tap trillions of dollars in equity and liquid assets built up as capital buffers since the financial crisis to support firms and people whose lives have been upended by the virus.
“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook,” the Fed said as it cut short-term rates to a target range of 0% to 0.25% and said it would buy at least $700 billion in Treasuries and mortgage-backed securities in coming weeks.
The Fed also said it would support US banks that began to tap the capital and liquidity buffers they built up in the aftermath of the 2008 financial crisis and would reduce reserve requirement ratios to 0% effective on March 26.
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