In the first quarter, the U.S. economy shrinks by 4.8

In the first quarter, the U.S. economy shrinks by 4.8 percent; Fed keeps interest rates close to zero. 

After a full decade of steady and record-breaking expansion, the U.S. economy shrank suddenly by nearly 5 percent in the first three months of 2020 — owing almost entirely to the coronavirus crisis, the Department of Commerce said in its quarterly report Wednesday. The department said for the first quarter, the first contraction since 2014, and the highest since the Great Recession, the U.S. gross domestic product contracted 4.8 per cent. 

The figures show that the domestic economy has expanded over the first two and a half months of the year, until coronavirus-related closures in mid-March brought it to a sudden halt. The fall is the highest since the final quarter of 2008 fell by 8.4 per cent. In the previous quarter, Q4 of 2019, the US economy expanded by 2.1 per cent.The department noted that the global health crisis has resulted in rapid declines in demand, impacting a large variety of the economy — and cautioned that the second quarter, April through June, is likely to display greater losses.

The Federal Reserve announced on Wednesday that it would maintain the federal interest rate at zero to 0.25 per cent while committing to using its "full range of tools" to support the economy in the midst of the pandemic. The curve of coronavirus appears to be flattening in the U.S. and many states are starting to lift the restrictions, but most experts believe it will be several months before the U.S. economy can return to a phase of steady growth. In the past five weeks in 26 million People have applied for unemployment.