Q1. FR officals decided during an emergency meeting last month that they wanted to take their benchmark rate to near zero and likely keep it there. 1 and 2 below are quoted from meeting on March 2020. Explain how 1 and 2 each affect long-term interest rate.

1.

"Members judged that the effects of the coronavirus would weigh on economic activity in the near term and would pose risks to the economic outlook. In light of these developments, almost all members agreed to lower the target range for the federal funds rate to 0 to 1/4 percent"

2.

"With regard to monetary policy beyond this meeting, these participants judged that it would be appropriate to maintain the target range for the federal funds rate at 0 to percent until policymakers were confident that the economy had weathered recent events and was on track to achieve the Committee's maximum employment and price stability goals"