March 2010 The Fed brings its first round of QE asset purchases to an end, having bought $300bn of long-term Treasuries and $1.25tn of mortgage-back securities. Economists predict that, by summer 2010, the bank will be thinking about raising interest rates. But it also signals that the pace of cash injections will be slowed. November 2009 With the UK economy still in recession in the third quarter, the Bank of England increases its asset purchase scheme to £200bn, in a move described as “one last heave”. The European Central Bank cuts interest rates by a quarter of a percentage point to a new low of 1 per cent and announces plans to buy €60bn of banks’ covered bonds.Īugust 2009 The Bank of England surprises markets by expanding its QE programme by a further £50bn to £175bn and warns that the “recession appears to have been deeper than previously thought”. May 2009 With a “substantial margin of spare capacity” still in the economy, the Bank of England increases its asset purchase scheme by £50bn to £125bn. The Bank of England cuts the base rate from 1 per cent to 0.5 per cent and launches ‘quantitative easing’ with £75bn of asset purchases to try to stimulate economic growth and hit its inflation target. March 2009 With the economy contracting rapidly, the Fed tries to lower borrowing costs by buying $300bn of longer-term Treasuries and a further $750bn of mortgages. The Fed says it is willing to buy long-term Treasuries. January 2009 The ECB cuts interest rates by 0.5 percentage points to 2 per cent.
#DOUBLE SIDE PRINTING WORD FOR MAC 2011 FULL#
The Bank of England lops a full percentage point off interest rates to 2 per cent while the ECB cuts by 0.75 percentage points to 2.5 per cent. The ECB cuts rates by half a percentage point and President Jean-Claude Trichet hints at further cuts.ĭecember 2008 The Fed slashes interest rates from 1 per cent to a range of between zero and 0.25 per cent to support the economy, and says it expects rates to stay at ultra-low levels “for some time”. With the IMF predicting a severe economic downturn, the Bank of England makes the biggest interest rate cut in its history, slashing rates by 1.5 percentage points to 3 per cent, their lowest level in 53 years. That includes buying up to $600bn of mortgage bonds of government-sponsored housing enterprises such as Fannie Mae and Freddie Mac, and lending up to $200bn to holders of AAA-rated securities backed by auto, credit card and other loans. November 2008 The Fed pledges $800bn to try to kickstart the financial system. Shock to the system: an employee of Lehman Brothers carrying belongings out of its offices following the bank’s collapse © Chris Hondros/Getty Images It also cuts interest rates by half a percentage point, as does the European Central Bank. The Bank of England launches a scheme to guarantee short-maturity bank debt. To try to shore up money-market mutual funds, which have come under severe redemption pressure, forcing them to cut short-term lending to banks, it also announces it will finance up to $540bn in purchases of their short-term debt. October 2008 With the financial system in turmoil, the Fed lifts the cap on swap lines with other major central banks and cuts the fed funds rate to 1 per cent. It also approves applications by Goldman Sachs and Morgan Stanley to become bank holding companies and allows them to access emergency loans, and lends up to $85bn to insurer AIG in return for a government stake of 79.9 per cent. September 2008 As the financial crisis deepens and investment bank Lehman Brothers files for bankruptcy, the US Federal Reserve broadens the collateral that can be pledged by primary dealers seeking overnight loans, extends swap lines with other central banks and increases the size of its Term Auction Facility. Taken together, it is the central bank’s most aggressive easing of monetary policy since the early 1980s. January 2008 After criticism that it is behind the curve in its response to the growing financial crisis, the Fed cuts the fed funds rate by 75 basis points to 3.5 per cent, and eight days later by 50 basis points to 3 per cent, in an effort to stave off recession. Auctions are extended “for as long as necessary”.
December 2007 The Federal Reserve’s first Term Auction Facility auction takes place, designed to ease a liquidity shortage among commercial banks.
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