The Federal Reserve announced today that it has slashed interest rates as part of an effort to stabilize the economy following a rocky week on the financial markets.
The bank's Board of Governors cut interest rates to near zero, the second time that the central bank has cut interest rates in as many weeks. The Federal Reserve also launched a $700 billion quantitative easing (QE) program to help prevent a further economic downturn sparked by the spread of coronavirus.
A statement said the bank will maintain its interest rates "until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals." The combination of interest rate cut and extensive QE will all but exhaust the Fed's stimulus options going forward.
Stock futures for the major market indices are currently down about 5% Sunday evening.
It comes after a painful week across U.S. financial markets. On Thursday, the Dow Jones Industrial Average (DJIA) dropped by just shy of 10% in the worst day of trading since 1987. A day later, the markets sharply rebounded.
President Trump also said on Sunday from the White House that Americans should "relax" and stop hoarding goods from stores, which are facing shortages as supply chains react to massively increased demand. Major online retailers like Amazon, Walmart and Target have reportedly run out of basic household goods, like toilet paper.
There are more than 142,000 confirmed cases of the COVID-19 coronavirus strain globally, according to the World Health Organization's latest situation report on Saturday, with some 3,300 confirmed cases in the United States.
The global pandemic has resulted in several countries, including Denmark and Poland, to shut their borders, and entire countries, like Italy and Spain, to go on lockdown, restricting the movements of its citizens in an effort to limit the spread of the virus.
Earlier on Sunday, U.K. authorities advised all British nationals and residents against all but essential travel to the United States.
News of the travel advisory came shortly before new U.S. travel restrictions are set to take effect on Monday night, effectively banning all travelers from Europe for 30 days — sparing only U.S. citizens and lawful permanent residents. The Trump administration later extended the ban to the U.K. and Ireland following a spike in confirmed infections.