In order to support the economy during the coronavirus pandemic, the American Central Bank (Fed) announced on Sunday (15) that it would reduce its interest rate target to zero.
The Fed last reduced rates to zero during the 2008 crisis.
In addition to rate cuts, the Fed also said it would buy another $ 700 billion in Treasury bills and mortgage-backed bonds. Purchases will start on Monday with a tranche of $ 40 billion.
The Central Bank also struck a deal with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, to reduce its rates on foreign exchange swaps to keep financial markets operating smoothly.
This is the second cut in interest rates in less than two weeks. In early March, rates were reduced by 0.5%, from 1.5% to 1%.
Last week the Fed also announced the injection of $ 1.5 trillion, plus $ 1 trillion a week through the end of the month into the markets through reverse repurchase operations.