On Sunday, the Federal Reserve announced that the interest rates are to be lowered down to almost zero for the Americans to acquire loan in the time of need at rates that are cheap as possible. This is just another measure taken in the light of the rapid spread of the coronavirus spread in the States. The American economy has been immensely hit with the outbreak of virus.
As per the amendments made, the new interest rate will now range in between 0 to 0.25 per cent, said the Central Bank. Even the Fed is now to buy Treasury securities and mortgage based securities in the coming months. Treasury securities of worth $500 billion and almost $200 billion worth of mortgage based securities are to be bought. This is to be done to support the markets and ensure their “smooth functioning”. The interest rates are to stay near zero until it is ensured that America has “weathered recent events.”
“The outbreak of coronavirus has harmed the communities and absolutely disrupted the economic activity in most countries, the United States has not been excepted,” stated the Fed. “With consistency in its statutory mandate, the Committee seeks to foster maximum employment and price stability. The effects of the coronavirus will possibly be weighing in on the economic activity in the coming term and therefore, pose risks to the economic outlook as well.”
“It makes me very happy,” said President Donald Trump regarding the measure taken at the time of a press conference on Sunday. “It’s really great for our country … I think that people in the markets should be thrilled,” he added.