The US Federal Reserve announced to drop interest rates to zero on Sunday. The Fed also announced to buy at least $700 billion in government and mortgage-related bonds as part of a wide-ranging emergency action to protect the economy from the devastating impact of the coronavirus outbreak. Bitcoin briefly surged to $5,900 after the Federal Reserve announced to cut interest rates.
Coronavirus outbreak dampens the global economy.
The US government took such measures for the first time since the financial crisis of 2008. According to the announcement, the effects of the coronavirus will weigh on economic activities in the near term and pose risks to the economic outlook. For that reason, the government decided to lower the target range for the federal funds rate to 0.25%.
Bitcoin continues to hover around $5,000.
After the US Federal Reserve announced rat cuts, the bitcoin price surged to $5,900 before it retraced to low 5,000. At the time writing, bitcoin is changing hands at just above $5,200. Last week bitcoin witnessed one of the worst days in seven years as the price stumbled to low $4,000 amid a global financial market breakdown. The USA was not the only country to announce such measures to revive the economy. The EU also adopted similar measures to protect the economy from the impact of the coronavirus outbreak.