The U.S. Federal Reserve unleashed new emergency measures on Sunday night to lim...
WASHINGTON/NEW YORK - The U.S. Federal Reserve unleashed new emergency measures on Sunday night to limit the economic harm from the coronavirus, including making it easier for banks to get money and slashing its benchmark borrowing rate to near zero.
U.S. consumer spending drives the world’s biggest economy, accounting for about 70% of gross domestic product. While the Fed’s moves impact banks and commercial borrowers most directly, they’re also designed to keep U.S. consumers solvent and spending money, albeit indirectly. No one knows how deep the financial hit from the coronavirus may be, or how long it will last. But with travel essentially stalled, airlines reeling, and cities shutting bars and restaurants, concerns are rising that big companies could be forced into bankruptcy.
The drop means that buyers will pay less, over the lifetime of the loan and people who refinance loans can shrink their monthly payment. At a 4% interest rate on a 30-year mortgage, a homeowner could expect a monthly mortgage payment of about $1,850 for a $350,000 home purchased with a 20% down payment, according to estimates from LendingTree.com, a housing website.
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