Federal Reserve slashes interest rates to zero

The Federal Reserve announced it would drop interest rates to zero and buy at least $700 billion in government and mortgage-related bonds as part of a wide-ranging emergency action to protect the economy from the impact of the coronavirus outbreak.

The moves, the most dramatic by the U.S central bank since the 2008 financial crisis, are aimed at keeping financial markets stable and making borrowing costs as low as possible as businesses around the country close and the U.S economy hurtles toward recession.

The Fed, led by Chair Jerome H. Powell, effectively cut its benchmark by a full percentage point to zero.

The benchmark U.S interest rate is now in a range of 0 to 0.25 percent, down from a range of 1 to 1.25 percent.

In addition to rate cuts, the Fed announced it is restarting the crisis-era program of bond purchases known as 'quantitative easing', in which the central bank buys hundreds of billions of dollars in bonds to further push down rates and keep markets flowing freely.

The Fed is also giving more-generous loans to banks around the country so they can turn around and offer loans to small businesses and families in need of a lifeline.

(with news agency inputs)