WASHINGTON (AP) — The Federal Reserve took emergency action Sunday and slashed its benchmark interest rate by a full percentage point to nearly zero and announced it would purchase more Treasury securities to encourage lending to try to offset the impact of the coronavirus outbreak.
The central bank said the effects of the outbreak will weigh on economic activity in the near term and pose risks to the economic outlook.
The central bank said it will keep rates at nearly zero until it feels confident the economy has weathered recent events.
The Fed also said it has dropped its requirements that banks hold cash reserves in another move to encourage lending.
U.S. stock futures fell sharply after the Federal Reserve slashed interest rates and more companies and governments took action over the weekend to shut down European and American society in the face of the growing virus outbreak.
Futures for the S&P 500 and the Dow industrials fell 5%, triggering a halt in trading.
Shares in Asia opened lower.
The price of oil fell while gold gained. U.S. markets are coming off a dizzying week that saw the Dow twice fall by more than 2,000 points and also record it’s biggest point gain every 1,985 points on Friday.