The outbreak of coronavirus causes tremendous human and economic hardship across the United States and around the world, the committee said in a statement. "The virus and measures taken to protect public health induce sharp declines in economic activity and an increase in job loss."
Politicians agreed after their two-day meeting in Washington to keep interest rates in the range of zero to 0.25% as they continued to see signs of a severely damaged economy.
The central bank said it would also continue to buy government securities and mortgage and commercial mortgages with security to keep markets afloat and functioning. And the Fed will continue to offer large-scale repurchase agreements to prevent the decisive lending market collapsing overnight.
Fed chairman Jerome Powell, as well as several other Fed board members, have stated against dropping rates on negative territory, as some other central banks have done.
"At the moment, the Fed is really pushing harder on the same old levers. We know from the financial crisis that these levers aren't enough to achieve sustainable growth, inflation and higher prices that everyone wants," said James McCann, global global economist at Aberdeen Standard Investments.
But the central bank needs to be bolder rather than resting on its laurels, increasing the scope and scale of its credit-mitigation measures, McCann said.
– This is an evolving story. It will be updated