Federal Reserve Chair Jerome Powell

(CN) – The Federal Reserve cut interest rates to zero on Sunday and is buying $700 billion in bonds as part of an effort to keep the economy from sliding into a recession amid the coronavirus outbreak.

“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” bank officials said in a statement.

The announcement comes as the Dow Jones Industrial Average has lost about 21% of its value over the past month. On Thursday, the Fed announced an offering of $1.5 trillion in short-term loans to banks. Sunday’s actions further cements the efforts the bank is taking to rein in losses.

The Fed will also increase purchases of U.S. bonds by $500 billion and mortgage-backed securities by $200 billion over the next few months. The increased holdings are meant to support the housing market and lower the cost of long-term debt.

The central bank is encouraging banks to give loans to businesses and individuals who may be vulnerable to changes in the market due to the coronavirus.

“The Federal Reserve supports firms that choose to use their capital and liquidity buffers to lend and undertake other supportive actions in a safe and sound manner,” the Fed said.

The Fed’s actions nearly mirror the actions it took in 2008 amid the housing crisis when it cut its key rate nearly to zero. When asked last week about whether the U.S. was in a recession, Treasury Secretary Steven Mnuchin said, “I don’t think so.”

“The real issue is what economic tools are we going to use to make sure we get through this,” he said.

Fed Chairman Jerome Powell and the rest of the board are scheduled to meet Wednesday to discuss policy and update forecasts for the economy.