The Fed has made a decision. We will continue to support the US economy

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Until the coronavirus pandemic is put under control and the US economy is on its feet, the Federal Reserve will continue to loosen monetary policy. This is the main conclusion of Wednesday’s meeting of the Committee on Open Market Operations, which decides within the Fed on the setting of monetary policy instruments.

“The Committee monitors the achievement of maximum employment and inflation rates at 2% over a long period of time,” the Federal Open Market Committee (FOMC) said in a statement on Wednesday. The aim is to keep inflation expectations at the same level.

The Committee expects to continue to promote the current acomodative monetary policy, holding the basic interest rate for open market operations between 0 and 0.25 percent. This is precisely until the objectives defined above are met. The FOMC does not rule out that inflation may rise above 2% in the short term, but this may be in line with the long-term objective.

The Federal Reserve will continue to buy government bonds worth at least $80 billion a month and purchase at least $40 billion a month in mortgage bonds. “Purchases of these assets will help improve the financial situation of businesses and households,” the FOMC added in a statement.


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