The Federal Reserve swept into action on Sunday in an effort to save the U.S. economy from the fallout of the coronavirus, slashing its benchmark interest rate by a full percentage point to near zero and promising to boost its bond holdings by at least $700 billion.
Underlining the sense of urgency amid mounting recession fears, Fed Chairman Jerome Powell told a hastily assembled press briefing by telephone that the virus’s disruption to lives and businesses meant second quarter growth would probably be weak and it was hard to know how long the pain would last. That left him advocating a clear role for fiscal policy to help cushion the blow.
