to contract, the US Federal Reserve on Sunday, March 15, announced drastic emergency measures to shore up confidence and keep the financial sector running, including slashing the key interest rate to virtually zero.in less than two weeks, lowering the benchmark borrowing rate to a range of 0% to 0.25%, where it was during the 2008 global financial crisis, and pledged to keep it there"until it is confident that the economy has weathered recent events.
The Fed joined forces with other major central banks to guarantee the global financial system has enough cash to continue to operate."What's happened with the Fed is phenomenal news," Trump said at a regular briefing of his coronavirus task force."I can tell you, I'm very happy." In joint action coordinated with the European Central Bank, Bank of England, Bank of Japan, Bank of Canada, and the Swiss National Bank, the central banks moved to counteract global"dollar funding pressures," Powell said.
Following its emergency meeting, the FOMC said"the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States." But Posen, head of the Washington-based Peterson Institute for International Economics, said the nature of this shock, which affects demand not just financial markets, is different than the last crisis, and the Fed moves"We have to be realistic that there's a limit on what monetary policy can achieve in this environment," he said, while praising the Fed's signal to banks that they should not just sit on their cash.
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