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Fed Announces Interest Rate Decision

In the statement made by the Fed, it was indicated that the decision to keep the interest rate constant was taken unanimously.

It was pointed out that the Federal Open Market Committee (FOMC) aims to achieve the goal of maximum employment and 2 percent inflation in the long term, and it was stated that it is expected to maintain the supportive stance of monetary policy until meet these goals. reached.

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The statement reported that it was decided to keep the target range for the federal funding rate between 0 and 0.25 percent.

The Fed, which does not change the bank’s verbal guidance regarding asset purchases, has stated that this policy has maximum employment and price stability targets of $ 120 billion, including at least $ 80 billion per month for bonds. Treasury and at least $ 40 billion per month for purchases of mortgage-backed securities. It was reported that it would continue until “significant progress” is made.

POWELL’S EXPLANATION

The president of the United States Federal Reserve (Fed), Jerome Powell, held a press conference by videoconference after the Fed held the monetary policy rate stable at 0-0.25 percent.

Stating that they have kept interest rates close to zero and decided to continue buying large assets, Powell said that these measures, along with strong verbal guidance on interest rates and the balance sheet, will ensure that monetary policy continues to support the economy. until recovery occurs. finished.

Stating that the surge in Covid-19 cases in recent months has caused hardship for millions of Americans and put pressure on economic activity and employment, Powell said: “After the strong recovery in economic activity last summer , the new escalation of cases and the weakness in the sectors most affected by more social distancing measures. The pace of recovery has slowed down in recent months. ” said.

“A SUFFICIENT VACCINATION WILL ENSURE THAT WE WILL RETURN TO NORMAL ACTIVITY”

Noting that the general recovery in economic activity since last spring is due in part to federal support payments and expanded unemployment benefits, Powell said the recently approved financial support package will also provide additional support.

“Overall, economic activity is below its pre-epidemic level and the way forward is quite uncertain,” Powell said. found the evaluation.

Stating that the economic disturbance negatively affected many lives and created great uncertainty about the future, Powell said the epidemic also left a significant mark on inflation and that inflation remained below the long-term target of 2 percent annually.

“While we should not underestimate the challenges we face now, some developments point to a better outlook later this year. Proper vaccination will allow us to leave the epidemic behind and return to more normal economic activities,” Powell said. I speak.

“THE ECONOMY HAS A LONG ROAD TO ACHIEVE ITS GOALS”

Emphasizing that support for fiscal policy will limit permanent damage, Powell said the economy has proven to be more resilient than expected.

“We expect monetary policy to maintain its supportive stance until employment and inflation targets are met,” Powell said. said.

Noting that there is a long way to go before the economy reaches its employment and inflation targets, Powell said “it will probably take some time to make significant progress.” I speak.

Powell, referring to the rise in asset prices, said that the expectation of fiscal policy and vaccination has become effective in the rise of recent months and that asset prices are not as close as is thought in monetary policy.

Noting that they will establish good communication in advance when it comes to reducing asset purchases, Powell said it is too early to talk about them.

Source: ntv news

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