The agency has announced that they will use “a full range of tools” to support the US economy.
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The US Federal Reserve has announced this March 15 that it will reduce interest rates to almost zero, as one of the coordinated monetary policy measures that you will apply to offset the economic impact of the coronavirus pandemic.
“The effects of the coronavirus will weigh on economic activity in the short term and pose risks to the economic outlook. In light of these events, the Committee decided to reduce the target range,” reads a Fed statement that says it will use “a full range of tools “to support the US economy
In this sense, the organism reduced rates to a target range of 0% to 0.25% and announced that it would expand its balance sheet by at least $ 700 billion in the coming weeks.
From the Fed they specified that they hope to maintain this objective range “until it is certain that the economy has withstood recent events and it is well on its way to achieving its maximum employment and price stability objectives. “
Other measures
Among other measures announced on Sunday night, the Fed encouraged banks to lend to businesses and households, whose balance sheets and lives have been altered by the virus, the trillions of dollars in stocks and liquid assets accumulated as buffers of capital.
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In addition, the Fed and five other foreign central banks – the Bank of Canada, the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank – lowered prices in their lines of exchange in the financial crisis in order to facilitate the supply of dollars to entities that are facing the stress of the credit markets.
The Fed had already cut interest rates by half a percentage point in the past March 3rd in a emergency meetingit turned out to be the first cut rate outside of a policy meeting scheduled since the 2008 financial crisis.
US President Donald Trump, who has repeatedly urged the Fed to cut interest rates, has called the agency’s recent measures “good news” that “makes him very happy.”
“It is really good news. It is great for the country“Trump assured at a press conference at the White House.
At the end of February, in the middle of a drastic drop in the stock market, Fed President Jerome Powell said at that time “the fundamentals of the United States economy were still strong.”
At the same time, he recognized that “the coronavirus presents evolution risks for economic activityIn this context, Powell assured that the Fed “closely follows” the evolution of the situation and its “implications for the economic outlook.”
“We will use our tools and we will act as appropriate to support the economy“he concluded then.
More information, soon.
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