The Fed clarified that it will keep the rate within this range until the crisis ends.
Only one participant in the meeting, Loretta J. Mester, president of the Cleveland Fed, voted against the resolution and favored a less severe reduction.
The Fed also participated in concerted action globally to ensure there is sufficient liquidity on Monday in the financial markets.
The rate cut was decided shortly before the Fed’s regular monetary committee meets on Tuesday and Wednesday.
Wall Street had its worst day since the October 1987 stock market crash on Thursday.
This is the second time since early March that the Fed lowers its benchmark rate without waiting for its regular monetary committee, which it has not done since the 2008 financial crisis.
The institution also announced the purchase of $ 500 billion in Treasury bonds and $ 200 billion in mortgage securities.
In the face of the panic caused by the coronavirus pandemic, the Fed had brought a lot of liquidity to the markets during the week, injecting several billions of dollars, and had resumed operations to buy US debt.
President Donald Trump immediately praised the gesture by the Fed, an agency that he has repeatedly criticized, as well as its president, Jerome Powell.
“I want to congratulate the Federal Reserve,” Trump said during a meeting on coronavirus at the White House. “It is really good news, it is very good for our country,” he added.
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