17-09-2020
The Federal Reserve kept interest rates pinned near zero on Wednesday and made a bold new promise to keep them there until inflation is ‘on track to moderately exceed the U.S. central bank’s 2% inflation target’
The new guidance marks a monetary policy shift, first announced by the Fed last month, that is aimed to offset years of weak inflation and allow the economy to keep adding jobs for as long as possible.
The Fed also used its policy statement to begin to pivot from stabilizing financial markets to stimulating the economy, saying that it would keep its current government bond-buying at least at the current pace of $120 billion per month, in part to ensure accommodative financial conditions in the future.
The coronavirus epidemic continued to weigh on the economy, the Fed said in its statement, released after the end of its latest two-day policy meeting, even as officials upgraded their immediate outlook for the economy.
The virus is causing tremendous human and economic hardship, the rate-setting Federal Open Market Committee said, adding that the Fed is committed to using its full range of tools to support the U.S. economy in this challenging time.