US rates slashed to historic lows

The US Federal Reserve (Fed) has cut the official cash rate overnight to an unprecedented zero to 0.25% range as the outlook for the economy continues to deteriorate.

According to the Fed’s Federal Open Market Committee – which sets monetary policy, the “overall outlook for economic activity has weakened further” and “inflationary pressures have diminished appreciably.”

To promote the resumption of sustainable economic growth and preserve price stability, the Fed said it would employ all available tools, including the purchase of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets.

The Fed also commented that weak economic conditions were “likely to warrant exceptionally low levels of the federal funds rate for some time”.