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Fed cuts rates to near zero, details $700B quantitative easing program

The Federal Reserve announced today an emergency rate cut in preparation for the mounting economic threat of the coronavirus.

The cut brings the interest rate down by 125 bps to a target range of  0% to 0.25% and goes into effect on Monday. 

"The Federal Reserve is carefully monitoring credit markets and is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals,” the Fed said in a statement.

In addition to rate cuts, the Fed also detailed plans to deploy $700B to purchase Treasury securities and agency mortgage-backed securities to help support the "flow of credit to households and businesses."

"Over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion," the Fed said in a statement.