WASHINGTON, D.C. (CBS News) — The Federal Reserve took emergency action Sunday and slashed its benchmark interest rate by a full percentage point to nearly zero and announced it would purchase $700 billion in Treasury and mortgage-backed securities to encourage lending to try to offset the impact of the novel coronavirus outbreak.

The U.S. central bank said the effects of the outbreak will weigh on economic activity in the near term and pose risks to the economic outlook. The Fed also said it will keep rates at nearly zero until it feels confident the economy has weathered recent events.

The Sunday cut is one of the most drastic steps the central bank has taken since the depths of the 2008 financial crisis. It is an effort to loosen up the country’s monetary supply and stimulate lending to try to counter the coronavirus’ growing damage to the U.S. economy and the financial markets.

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