Fed Cuts Rates To Near Zero As Coronavirus Rips Through Economy

Federal Reserve Chairman Jerome Powell                                             Eric Baradat/AFP via Getty Images

The Federal Reserve cut its key interest rate to near zero, a dramatic move not seen since the depths of the 2008 financial crisis.

The one-percentage-point decrease was the U.S. central bank’s second emergency rate cut this month in an attempt to cushion the rapidly growing economic effects of the coronavirus pandemic.

The Fed also announced plans to buy $700 billion in government securities.

“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook,” the Fed said in a statement announcing the moves Sunday. “In light of these developments, the [Federal Open Market] Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.”

President Trump — who has often slammed the Fed for first raising rates and then not cutting them more quickly — praised the actions minutes later.

Navy Vet

Article URL : https://www.npr.org/2020/03/15/816175414/fed-cuts-interest-rates-to-near-zero