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."

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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.