Chairman Jay Powell on massive actions taken by the Federal Reserve to aid economy

well nonetheless understandably take a

toll on economic activity in the near

term well the primary response to this

challenge will come from our health care

providers and policy experts economic

policymakers must do what we can to ease

hardship caused by the disruptions to

the economy and to support a swift

return to normal once they have passed

the thorough reserves role is guided by

our mandate from Congress to promote

maximum employment and stable prices for

the American people along with our

responsibilities to promote the

stability of the financial system today

we reduced the target range for our

policy interest rates by one percentage

point bringing it close to zero and so

that we expect to maintain the rate at

this level until we're confident that

the economy has weathered recent events

and is on track to achieve our maximum

employment and price stability goals in

addition we took other actions to

support the flow of credit to households

and businesses before describing our

actions more fully I will share how my

colleagues and I currently view the

economic outlook the economy came into

this challenging period on a strong

footing the unemployment rate was 3.5

percent in February and has been at or

near half century lows for almost two


job gains have been running at a solid

pace well above what is needed to

provide jobs for new entrants into the

labor market participation in the labor

force by people in their prime working

years remain near its highest rate in

more than a decade and wages have been

rising particularly for lower paying

jobs overall economic activity has been

expanding at a moderate rate even though

we growth abroad and trade developments

have been weighing on some sectors US

banks are strong have high levels of

capital and liquidity and are

well-positioned to provide credit to

households and businesses

against this favorable backdrop the

virus presents significant economic

challenges like others we expect that

the illness and the measures now being

put in place to stem its spread will

have a significant effect on economic

activity in the near term those in

travel tourism industries are already

seeing a sharp drop in business in

addition the effects of the outbreak are

restraining economic activity in many

foreign economies which is causing

difficulties for us industries that rely

on global supply chains the weakness

abroad will also weigh on our exports

for a time

moreover the energy sector has recently

come under stress because of the large

drop in global oil prices inflation

which has continued to run below our

symmetric 2 percent objective will

likely be held down this year by the

effects of the outbreak initial

conditions have also tightened markedly

the cost of credit has risen for all but

the strongest borrowers and stock

markets around the world renowned

sharply moreover the rapidly evolving

situation has led to high volatility in

financial markets as everyone tries to

assess the path ahead in the past week

several important financial markets

including the market for US Treasury

securities have at times shown signs of

stress and impaired liquidity the market

for Treasury securities is a critical

part of the foundation of the global

financial system it is generally the

most liquid of all markets and serves as

the benchmark mark by which many other

financial assets are valued it plays an

important role in allowing households

and firms to earn a safe return and

manage their risks when the stresses

arise in the Treasury market that can

reverberate through the entire financial

system and the economy

is from happening and to support the

smooth functioning of the Treasury

market we announced today that we will

purchase at least 500 billion of

Treasury securities over the coming

months similar stresses have also

emerged in the market for agency

mortgage-backed securities which is

closely linked to the Treasury market

and critically supports the ability of

people to get a mortgage to buy a house

or refinancing existing mortgage to

improve the functioning of this market

and to ensure the effective transmission

of monetary policy to borrowers in the

economy we will also purchase at least

200 billion dollars of agencies -

mortgage-backed securities over coming

months and immediately cease the runoff

of these securities in our portfolio

while the primary purpose of these

securities purchases is to restore

smooth market functioning so if credit

can continue to flow the purchases will

also foster more accommodative financial

conditions the Reserve announced a

number of other actions today to support

support the flow of credit to households

and businesses thereby promoting our

maximum employment and price stability

covers of these I will highlight two

first we reduced the interest rate on

discount window loans by one-and-a-half

percentage points bringing that rate to

a quarter of a percent the discount

window plays an important role in

supporting liquidity and stability in

the banking system and we encourage

banks to turn to the discount window to

help meet demands for credit from

households and businesses

it makes the discount window more

effective we will also offer discount

window loans for periods up to 90 days

because of the importance of the US

dollar in the global economy strains and

markets for borrowing and lending

dollars overseas can disrupt financial

conditions here in the United States to

guard against such disruptions the

Federal Reserve maintains swap lines

with five major central banks

when dollar funding pressures emerge

abroad so central banks can contain the

pressures in their jurisdictions and

prevent them from impeding the flow of

credit here at home to address potential

pressures in these markets during the

current period of elevated uncertainty

we made a coordinated announcement with

the Bank of Canada the Bank of England

the Bank of Japan the European Central

Bank and the Swiss National Bank to

reduce the pricing on our dollar swap

lines in addition our central bank

counterparts will begin offering dollars

to institutions in their jurisdictions

for a term of 84 days in addition to the

usual one-week operation these

long-standing raid arrangements carry no

risk to the Federal Reserve or to the

American taxpayer I won't go into detail

on the other actions we took today but

they involved eliminating reserve

requirements for banks and encouraging

banks to make use of intraday credit

with the Federal Reserve and to use

their capital and liquidity buffers as

they support lending to households and

businesses the actions we have announced

today will help American families and

businesses and indeed our entire economy

whether this difficult period and will

foster a more vigorous return to normal

once the disruptions from the

coronavirus abate we will continue to

closely monitor economic and financial

developments and their implications for

the economic outlook we are prepared to

use our full range of tools to support

the flow of credit to households and

businesses to help keep the economy

strong and to promote our maximum

employment and price stability goals

finally let me note that today's FOMC

meeting was in lieu of the meeting

scheduled for next Tuesday and Wednesday

thank you I'll be I'll be happy to take

your question