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US Fed cuts interest rate to zero and launches quantitative easing

by ChemOrbis Editorial Team - content@chemorbis.com
  • 16/03/2020 (05:35)
In sweeping measures to combat the impact of COVID-19 on economies, the US Federal Reserve (Fed) will be cutting interest rates to 0-0.25% and launched large scale quantitative easing.

In an emergency statement on Sunday evening, the Fed said it decided to cut the target range for federal funds rates by half a percentage point “in an attempt to limit the impact of coronavirus on economic and financial markets.”

The US Fed combined the move with quantitative easing amounting to at least $700 billion of asset purchases in the coming months. It will do this by increasing its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion.

Global stock markets plunged last week after the World Health Organization (WHO) declared COVID-19 a global pandemic as the spread intensified in Europe and the US.
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