The Fed cut short-term rates to zero, renewed bond purchases to lower long-term rates and encouraged bank loans to combat the coronavirus's impact.
The Federal Reserve unleashed 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 central bank is also renewing its bond buying campaign, saying it will purchase $500 billion in Treasury bonds and $200 billion in mortgage-backed securities to lower rates for mortgages and other consumer and business loans. The Fed said it will reinvest those proceeds instead of letting them roll off its books.
"Great news, but not enough on its own," economist Ian Shepherdson of Pantheon Macroeconomics wrote of the rate cit and bond purchases in a note to clients. He said Congress needs to do more than the package the House passed late Friday to help Americans whose health and jobs have been affected. It’s also encouraging banks to use the their more than $4 trillion in post-crisis capital cushions to lend money to households and businesses. Those buffers have been designed to guard against another financial crisis.
Trump has been critical of the Fed and Chairman Jerome Powell, whom he appointed to the chairmanship in 2017. Trump has argued that interest rate hikes have slowed economic growth.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Wall Street weekahead: Investors hope Fed can help calm markets as big rate cut expectedAn economic stimulus plan, another potential deep rate cut by the Federal Reserve and quality results from economic bellwether FedEx - these are some potential market moving impacts that investors will be fixated on next week
Read more »
Fed starts bond purchases under ramped up liquidity programThe U.S. Federal Reserve on Friday launched a wave of $37 billion of Treasury se...
Read more »
How Food Banks Are Gearing Up To Keep People Fed As Coronavirus SpreadsAs coronavirus spreads, food banks are increasing their orders and calls for volunteers in anticipation of higher demand for food assistance, and are preparing distribution plans so they can still reach vulnerable populations. wamu885
Read more »
Fed may announce commercial paper facilities Sunday - BofAThe Federal Reserve may announce measures on Sunday night aimed at bolstering li...
Read more »
Fed Slashes Rates to Fight Coronavirus SlowdownBreaking: Fed cuts rates to near zero and will purchase $500 billion in Treasurys, $200 billion in mortgage-backed securities, citing economic disruptions from coronavirus
Read more »
Trump says 'relax,' urges against hoarding as coronavirus cases soar and Fed cuts rates to zero'You don't have to buy so much,' Trump said, urging against panic buying in the face of the coronavirus pandemic. 'Take it easy. Relax.'
Read more »