Fed slashes rates to near-zero as part of extended emergency coronavirus response
The Federal Reserve dropped interest rates to near zero on Sunday as part of an extended and ongoing emergency response to the economic downturn caused by the novel coronavirus outbreak, The New York Times reports. In addition to dropping the benchmark interest rate to a range of 0 to 0.25 percent, the Fed announced it will buy at least $500 billion in Treasury securities and $200 billion in mortgage-backed securities "over coming months."
"This better work because I don't know what they have left and no amount of money raining from the sky will cure this virus," said Peter Boockvar, the chief investment officer at Bleakley Advisory Group, as reported by CNBC. "Only time and medicine will."
Speaking at a news conference Sunday evening, Fed Chair Jerome H. Powell acknowledged that "the virus presents significant economic challenges" as workers are forced to quarantine themselves to mitigate the spread of disease. President Trump congratulated the Fed on the move, adding "people in the market should be very thrilled."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
That remains to be seen. The decision comes after a historically tumultuous week: "After peaking at an all-time high of 29,551.42 on February 12, the Dow Jones Industrial Average began falling as panic and economic disruption from the coronavirus outbreak spread across the globe," writes The Week's Jeff Spross. "On Wednesday, the Dow's plunge closed just over 20 percent below its February peak, crossing the magic threshold of bear market territory, and ending what is widely considered the longest bull market run in history."
While the end of the week saw a brief rebound, U.S. stock futures had dropped 5 percent Sunday despite the Fed's efforts, hitting the limits for trading.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Create an account with the same email registered to your subscription to unlock access.
Jeva Lange was the executive editor at TheWeek.com. She formerly served as The Week's deputy editor and culture critic. She is also a contributor to Screen Slate, and her writing has appeared in The New York Daily News, The Awl, Vice, and Gothamist, among other publications. Jeva lives in New York City. Follow her on Twitter.
-
'Make legal immigration a more plausible option'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
LA-to-Las Vegas high-speed rail line breaks ground
Speed Read The railway will be ready as soon as 2028
By Peter Weber, The Week US Published
-
Israel's military intelligence chief resigns
Speed Read Maj. Gen. Aharon Haliva is the first leader to quit for failing to prevent the Hamas attack in October
By Justin Klawans, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published