The outcome of the Federal Reserve Board of Governors meeting is to leave loose monetary policy unchanged. The Fed has even signaled its readiness to buy government bonds and do anything to support the US economy.
The U.S. dollar wrote off previous gains on Thursday, weakening to its lowest level in two weeks against a basket of major currencies. It even hit a seven-month low against the Japanese yen. A meeting of the US central bank’s governing council – the Fed – seems to be to blame. The Federal Reserve has left its loose monetary policy unchanged when the base interest rate corresponds to a technical zero.
The Fed has also signaled that it is prepared to do virtually anything to help the US economy get out of the deep crisis, or continue the recovery it experienced in the third quarter. Because the fiscal package has so far failed to make it through the US Congress, Fed Governor Jerome Powell has expressed confidence that it is monetary policy that must help the economy all the more. But critics say the Fed no longer has any effective tools, as it has already shot all its patrons in response to the first wave of the epidemic.