Breaking: Fed slashes rates to zero

FXStreet Team FXStreet

Fed slashes rates to zero.

Federal Reserve Issues FOMC Statement - Press Release

Jerome Powell press conference is scheduled for 22:30GMT.

As mentioned in today's What you need to know for markets opening: Europe on lock-down, risk-off firmly back on the agenda, dollar funding is a theme and we are seeing a coordinated effort from the central banks to alleviate the pressures.

The Fed announces coordinated action with Bank of Canada, Bank of England, Bank of Japan, European central bank and swiss national bank. Six global central banks have agreed to lower pricing on US dollar liquidity swap arrangements by 25 bps.

Central bankers crossing the wires

BoE's Carney and Bailey say today's actions will ease strains in global funding markets, support supply of credit to households and businesses.
Say major UK banks are well placed to withstand severe market disruption
BoE's Carney and Bailey say today's global action complements package of measures taken by BoE last Wednesday.
BoE says central banks will offer US dollar swaps with an 84-day maturity, in addition to existing one-week operations.
BoE says changes will take effect from next scheduled operation.
BoE says new pricing and maturity options will remain in place as long as needed to support smooth functioning of US dollar funding markets.
Central banks have agreed to lower pricing on standing u.s. dollar liquidity swap arrangements by 25 basis points - Bank of Canada.
Swiss National Bank says joins coordinated central bank action to enhance the provision of liquidity via standing US dollar liquidity swap line arrangements
SNB says six central banks agreed to lower the pricing on standing US dollar liquidity swap arrangements by 25 basis points.

Trump speaks out

President Donald Trump says fed rate cut makes him very happy.
Says congratulates federal reserve, thinks action is 'terrific'
Says Fed purchase of US treasuries and mortgage-backed securities is 'very good news'.

Markey reaction

The US dollar dropped hard vs the yen after the Federal Reserve cut interest rates to near zero percent in an emergency move amid the economic impact of the coronavirus outbreak. The Fed cut interest rates for the second time in less than two weeks on Sunday, reducing to a target range of 0% to 0.25%. The dollar fell against the yen to 106.44 yen while the euro rose to $1.1178.

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