The Federal Reserve cut its key interest rate to near zero. The bold move was designed to shield the U.S. economy from the effects of the novel coronavirus pandemic and encourage more bank loans to individuals and businesses.
President Trump, flanked by members of the White House Coronavirus Task Force, announced from the White House briefing room on Sunday, March 15 that the central bank agreed to lower the Fed’s benchmark federal funds rate by a full percentage point to a range of zero to 0.25 percent. He added that the Federal Reserve also plans to buy $700 billion in government securities.
"The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook," the Fed said in a statement. “The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
This marks the second emergency rate cut in less than one month. On March 3, the Fed cut rates by half a percentage point—the first time since late 2008.
The Fed is usually off-limits to U.S. presidents, but Trump has repeatedly slammed the central bank for not cutting rates more quickly. In Sunday’s briefing, he praised the Fed’s actions.
"It makes me very happy,” Trump said.
The decision comes as the number of confirmed U.S. COVID-19 cases continue to climb and schools, restaurants and businesses nationwide announce closures in a desperate attempt to curb the spread of the highly contagious infection.
During the briefing, Trump also pointed out that he’s met with the leadership of major grocery chains who are urging Americans to stop buying and hoarding food and supplies.
"You don't have to buy so much. Just take it easy," Trump said. He insisted that stores will remain open for business and will continue to re-stock around the clock. There is “no need to hoard” essential supplies, according to Trump, who noted that the coronavirus is very contagious but “something we have tremendous control over.”
Trump added that his administration is working with the private sector to roll out high-speed COVID-19 testing capabilities in all 50 states. He pointed out that drive-thru testing is already available in 10 states.
Vice President Mike Pence noted that until testing capabilities ramp up, certain people will be prioritized, including healthcare workers and first responders, people older than 65 and those with underlying chronic health issues who have symptoms and suspect they may be infected. Pence added that the House of Representative passed the coronavirus relief bill, which among other measures will ensure that coronavirus testing is free for everyone in the United States—even the uninsured. The Senate is set to vote on the legislation this week, according to Pence.
Updated in March 2020.
