The Federal reserve lowered interest rates to almost zero and introduced a wide range of programs — including plans for buying huge amounts of government and mortgage debt in an attempt to support the US economy, as the spread of the coronavirus poses a serious threat to economic growth.
“Outbreak of coronavirus has damaged communities and destroyed economic activity in many countries, including the United States, “reads the statement of the Central Bank on Sunday. “The Federal reserve is willing to use the whole range of tools to support the flow of credit to households and businesses“.
In addition to reducing the key interest rate by a full percentage point and return it in the range of 0 to 0.25 percent, the fed said it will increase its assets Treasury securities of at least $ 500 billion. United States, as well as its public securities secured by a mortgage on at least $ 200 billion “in the coming months.”
“The Committee will continue to closely monitor market conditions and willing to adjust their plans accordingly, “—said in the message.
The fed also encouraged banks to use its discount window, which provides easy access to Finance, and stated that “encourages banks to use their capital and liquidity buffers for lending to households and businesses.” The fed also abolished the requirement for Bank reserves is a complex of measures to free up banks for lending.