US Federal slashes key interest rate to zero amid pandemic

Washington : Faced with a growing economic shutdown from the global new coronavirus pandemic, the US Federal Reserve has announced drastic emergency measures to shore up confidence and keep the financial sector running, including slashing the key interest rate to virtually zero.

The Fed on Sunday made its second emergency rate cut in less than two weeks, cutting the benchmark borrowing rate to a range of 0-0.25 percent, where it was during the 2008 global financial crisis, and pledged to keep it there 'until it is confident that the economy has weathered recent events.'

The central bank also announced massive asset purchases, opened its discount lending windows to banks and urged them to use it to help businesses and households. In another move, it removed bank reserve requirements to allow them to use cash backstops.

President Donald Trump, who has been critical of the independent Fed for not acting more aggressively, praised the moves.

"What's happened with the Fed is phenomenal news," Trump said at a regular briefing of his coronavirus task force.

"It's a tremendous thing that took place just now," he said. "I can tell you, I'm very happy. I didn't expect this. And I like being surprised."

In addition, the Fed joined forces with other major central banks to guarantee the global financial system has enough cash to continue to operate.