In a stunning turn of events, the U.S. Federal Reserve (US Fed) has announced that it is cutting its benchmark interest rates to near zero.
This brings the benchmark interest rates down to a range of 0 to 0.25%.
More significantly, this is the US Fed’s second emergency cut of interest rates within a short span of two weeks.
It will also buy at least USD$500 billion of Treasury securities and $200 billion of mortgage-backed securities, as part of a broad emergency action to safeguard the economy from the impact of the COVID-19 outbreak.
This move is one of the most striking actions that the U.S. Central bank has taken since the 2008 financial crisis.
Ironically, even though the economic tools that it has at its disposal are great for:
easing of borrowing rates facilitation of lending, and boosting confidencethe dropping of the interest rates will not necessarily
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