Washington, D.C. — Today, the Federal Reserve announced that it would cut short-term interest rates to zero. Following the announcement, Andres Vinelli, vice president of Economic Policy at the Center for American Progress, issued the following statement:
The Fed’s decisive move to cut interest rates was an important and necessary step to support the economy and to mitigate the economic consequences of the coronavirus pandemic. In this new scenario, the Federal Reserve’s role as a lender of last resort comes to the fore. The Federal Reserve needs to ensure financial market liquidity and continued access to credit by businesses—and small businesses in particular.
It is also critical that we employ all other available tools to make the most of the Federal Reserve’s decision. Large-scale fiscal stimulus is now even more essential. Fiscal stimulus helped the United States recover from the Great Recession, and it is our most powerful lever to support the economy now.
Fiscal stimulus will provide lifesaving resources for public health, much-needed cash for families, and financial relief for businesses. As Seth Hanlon and I wrote several days ago, the United States has enough fiscal capacity to support the economy; the only question is whether the political will exists on the part of Congress and the Trump administration to do so.
For more information or to speak with an expert, contact Julia Cusick at email@example.com or 202-495-3682.
To find the latest CAP resources on the coronavirus, visit our coronavirus resource page.