QE4 Begins: Fed Cuts Rates, Buys $700B in Bonds; Bitcoin Rallies 7.7%

The Federal Reserve decided it had to act quickly and severely to cut rates on Sunday, slashing the target fed fund rates — the interest depository institutions charge one another overnight for reserves — to between 0.0 and 0.25 percent. The full percentage point cut was four times more than its usual move.

The Fed’s return to ZIRP — zero interest rate policy — was brought about by the threat coronavirus is placing on the U.S. and global economy. It was done at the Federal Open Market Committee’s (FOMC) meeting, which was urgently moved up to Sunday from a previously scheduled one on Tuesday.

The last time rates were cut to this level was Dec. 2008, where it remained for seven years. It inched up as high as 2.5 percent by 2018, before the Fed began cutting. Just two weeks ago, it was brought down to 1.0 to 1.25 percent.

“The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the FOMC said in its…