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Mortgage Rates Likely To Fall after Fed Slashes Rates

The Fed again cut rates by surprise by 1 point on Sunday, bringing them back to a range of 0-0.25% due to the economic consequences of the new coronavirus epidemic

"The effects of the coronavirus will weigh on economic activity in the short term and present risks to the economic outlook," said the US Central Bank in this release.



The Federal Reserve has clarified that it will keep rates within this range until the crisis is over. Only one participant, Loretta J. Mester, president of the Cleveland Fed, voted against this measure and was in favor of a lower rate cut.

In addition to the Fed's strong move, it participated in concerted action at the global level to ensure that there will be enough cash on Monday.

President Donald Trump congratulated the Federal Reserve. “It makes me very happy. And I want to congratulate the Federal Reserve, "said Trump during a press conference at the White House. "This is really good news, it's really good for our country," he added, saying that the United States was "by far the strongest country in the world."

"I don't know if this (such a decision, editor's note) ever happened on a Sunday. But I think many on Wall Street are very happy. And I can tell you, I am very happy. I did not expect this. And I like to be surprised, "added the American president, who often has very tense relations with Fed leaders.
The rate cut was taken while the usual Fed monetary committee, which will meet Tuesday and Wednesday, must reassure the markets. Wall Street had its worst day on Thursday since the stock market crash of October 1987.
This is the second time since the beginning of March that the Fed has cut rates outside of its usual monetary committee, which it has not done since the 2008 financial crisis.

The Fed has also announced the purchase of $ 500 billion in treasury bills and $ 200 billion in mortgage securities.

Faced with panic, it had watered the liquidity markets all week, bringing several trillions of dollars, and had resumed with the redemptions of American debt through the Treasury bills.

President Trump immediately praised the Central Bank's gesture, which he and his president Jérôme Powell have repeatedly criticized.

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