The US Federal Reserve moved deeper into uncharted waters yesterday, heralding further dramatic and unconventional measures to support the economy as it slashed interest rates from 1% to virtually zero.
In a historic statement, the US central bank said interest rates would be fixed at a record low in a range between zero to 0.25% and vowed to use 'all available tools to promote the resumption of sustainable growth and to preserve price stability'.
The Fed said it stands ready to step up its planned purchases of securities issued by Fannie Mae and Freddie Mac, the mortgage giants now under government control, sending their yields tumbling. It also said it was 'evaluating the potential benefits of purchasing longer term Treasury securities'.
Financial Times, The Times, Daily Telegraph