Desperate Fed cuts interest rates to zero, but market still tumbles

Determined to keep the economy from completely collapsing due to the COVID-19 crisis, the Federal Reserve cut interest rates to zero for the first time since the 2008 financial crisis. The Fed also instituted a new quantitative easing program.

In a Sunday night press conference, Fed Chairman Jerome Powell said that the urgent actions are designed to motivate banks to support businesses, amidst growing concerns that businesses will have to close their doors and possibly lay off workers.

“The actions we have announced today will help American families and businesses, and indeed, our entire economy weather this difficult period and will foster a more vigorous return to normal once the disruptions from the coronavirus abate,” Powell said in a statement.

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But the move did little to quell deepening uneasiness in the financial community. After a number of wild swings last week, the Wall Street Standard and Poors Index fell 10% at the start of trading Monday morning.

In a Bloomberg report, reaction from analysts was mixed, with some stating the measures would help stabilize jittery financial markets, but others warning that the central bank’s emergency actions risked adding to investor panic.

Meanwhile, concerns that the U.S. may be nearing a complete shutdown continue to circulate, despite President Trump insisting this will not happen.

New York City Mayor Bill De Blasio announced Sunday evening it would shut down the largest public school system in the U.S. for at least a month, and restaurants would be only allowed to stay open for take-out and delivery orders.