Emergency move made by The Fed to protect the economy

Emergency move made by The Fed to protect the economy

Radical measures are taken to protect the economy in this time of crisis.


The Federal Reserve announced on Sunday that it would drop the interest rate to zero. The benchmark U.S. interest rate is now in a range of 0 to 0.25%, down from a range of 1 to 1.25%.

Also, the Fed said that it would increase its holdings of Treasury securities by at least $500 billion and its holdings of government mortgage-backed securities by at least $200 billion over coming months, effectively launching a quantitative easing program.

“The committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate,” it said.

This is the 3rd time in a month when the U.S. central bank took emergency action to protect the financial markets and the economy. On March 3, it cut rates by 0.5% and last week in the face of an accelerating market meltdown it injected cash into short-term funding markets and launched a wave of Treasury security purchases.


Sources: investing.com, washingtonpost.com, nytimes.com

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