The Federal Reserve did not pull out any surprises on Wednesday.
Jerome Powell and Associates left interest rates unchanged near zero, and said that this target range of between zero percent and 0.25 percent will be here to stay until the economy fully recovers.
The Fed also confirmed that it will keep its various stimulus and relief tools intact until officials are confident that the U.S. has survived the covidepression. The central bank also confirmed that its dollar liquidity swaps and temporary repo operations will be extended until March 31, 2021
Officials from the Federal Open Market Committee (FOMC) said in a statement:
Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year. Weaker demand and significantly lower oil prices are holding down consumer price inflation. Overall financial conditions have improved in recent months, in part reflecting policy measures to support the economy and the flow of credit to US households and businesses.
Financial markets, including gold, hardly reacted to the news since it was widely expected the Fed would leave rates where they are.
What is interesting is that the Fed funds future is projecting subzero interest rates sometime next year. Get ready to freeze?
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