By Jonnelle Marte and Heather Timmons
WASHINGTON/NEW YORK (Reuters) – The U.S. Federal Reserve unleashed new emergency measures on Sunday night to limit the economic harm from the coronavirus, including making it easier for banks to get money and slashing its benchmark borrowing rate to near zero.
In a move reminiscent of the extraordinary steps the central bank took in the 2007-09 financial crisis, the Fed will flood the financial system with cash to ensure markets keep functioning and banks have the scope to keep credit flowing to businesses and consumers during the growing number of shutdowns prompted by the outbreak.
U.S. consumer spending drives the world’s biggest economy, accounting for about 70% of gross domestic product. While the Fed’s moves impact banks and commercial borrowers most directly, they’re also designed to keep U.S. consumers solvent and spending money, albeit indirectly.
Fed chair Jerome Powell conceded on Sunday…
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