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Fed ramps up help to US economy on life support

Published : Mar 24, 2020, 11:34 am IST
Updated : Mar 24, 2020, 11:34 am IST

The Federal Reserve warned of "severe disruptions" from the virus as it rolled out another series of measures to pump funds into the economy

 Representative Image (AFP)
  Representative Image (AFP)

Washington: The Federal Reserve launched an unprecedented effort on Monday to flood the US economy with money amid the chaos caused by the coronavirus pandemic, as Congress debated a rescue plan for American workers and companies.

Like patients around the world battling the disease itself, the US economy is on life support, with some forecasters projecting a 14 percent contraction in the April-June quarter while the global economy could shrink 1.5 percent this year.

Americans have been ordered to stay at home, and the Fed warned of "severe disruptions" from the virus as it rolled out another series of measures to pump funds into the economy, including buying unlimited amounts of government debt a move akin to printing money.

President Donald Trump signaled his approval of the Fed's move last weeks to slash the benchmark lending rate to zero, saying central bank chair Jerome Powell had "done a really good job," in a reversal of previous criticism over his refusal to lower rates.

The president also praised the strong US dollar but acknowledged it makes "trade much tougher"  an unusual statement from an American president, who typically don't comment on the currency's value.

Treasury Secretary Steven Mnuchin spent the day meeting with congressional leaders, and played down Democratic concerns about taxpayers coming to the rescue of major corporations.

Tags: us economy, federal reserve, coronavirus impact, covid 19, coronavirus economy