The Fed’s using all its emergency tools to prevent economic disaster. Here are 4 things to know.
With the coronavirus pandemic hitting the U.S. and world economies hard, the Federal Reserve has taken emergency steps to stabilize financial markets and lower borrowing costs. Moving days before a previously scheduled monetary policy meeting, the Fed’s emergency measures — including two interest rate cuts in the past two weeks — aim to support the economy and mitigate a financial crisis, both here and abroad.Here’s what you need to know.1. The Fed quickly moved into crisis-fighting modeLast Thursday, the Fed announced it would offer $1.5 trillion in short-term loans to push cash into money markets. Then, over the weekend, it dropped interest rates to zero and resumed buying bonds, both efforts last used during the global financial crisis from 2007 to 2010. The Fed then announced it would launch a $10 billion special fund to help keep credit flowing to households and business. This weekend, the Fed also revved up its “currency swap lines” with five major foreign central banks: the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank. The move makes U.S. dollars available overseas at cheap rates, as the global battle with the covid-19 pandemic grows increasingly severe.Or, to put