U.S. Fed slashes rates to cushion coronavirus blow

U.S. Fed slashes rates to cushion coronavirus blow

The U.S. Federal Reserve and global central banks moved aggressively to buttress a world economy unraveling rapidly amid the coronavirus pandemic, with the Fed slashing interest rates to 0.25%.

The Fed lowered the primary credit rate by 150 basis points in order to encourage banks to tap its emergency lending window. Depository institutions may borrow from this so-called discount window for periods as long as 90 days, pre-payable and renewable by the borrower on a daily basis, it said.

In a news conference Federal Reserve chairman Jerome Powell said the epidemic was having a "profound" impact on the economy.

Given the depth and uncertainty of the risks, Powell said the Fed and other central banks were acting to ensure that financial markets keep functioning around the world, and trying to limit the chance that companies, households or financial institutions are dragged down by any slump in business, Reuters reported.

U.S. President Donald Trump called the actions "good news" that "makes me very happy."

It was the third time this month the U.S. central bank took emergency action to protect financial markets and the economy.