US: Fed Cuts Rate to as Low as Zero, Will Use All Tools
The Fed cut the main US interest rate to as low as zero and said it will buy debt as the next step in combating the longest recession in a quarter-century and reviving credit. The Fed will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. Treasury notes rallied in anticipation the Fed will buy the securities to force borrowing costs for consumers and companies lower. Nine rate cuts in the prior 14 months and US$1.4trn in emergency lending failed to reverse the economic downturn.
(Bloomberg)
