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Home / US Business / Powell says & # 39; we have not won this yet & # 39; as the Fed keeps interest rates stable

Powell says & # 39; we have not won this yet & # 39; as the Fed keeps interest rates stable



The Federal Reserve kept its key interest rate close to zero, and asset purchases were steady as it sought to maintain a massive dose of support for the US economy as it suffered another downturn.

After a two-day meeting on Wednesday, the first since Joe Biden replaced Donald Trump in the White House, the Federal Open Market Committee reiterated that it would continue to buy $ 120 billion in debt until "significant further progress" had been made in the recovery, a goal it outlined in December.

The Fed described a weakening of recovery as the United States suffers from the latest wave of coronavirus infections, leading to net job losses in December and weakness in other economic data. [1

9659002] "We have not won this yet," said Fed Chairman Jay Powell during the post-meeting press conference. The path to the pandemic would be crucial to the economy, he said, and obtaining herd immunity through vaccinations would be a "struggle".

In its statement, the FOMC said: "The pace of recovery in economic activity and employment has been moderate in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic."

The Fed said that it would keep the key interest rate in the target range between 0 and 0.25 per cent until the economy reached full employment and inflation was about to exceed 2 per cent for some time, repeating the guidelines it has maintained since September.

The Fed's commitment to maintain loose monetary policy with higher tolerance for inflation increases and a deeper commitment to full employment, was stated by Powell in August in a statement on the central bank's long-term policy goals, on Wednesday the Fed decided to reaffirm its commitment to these goals by re-issuing the statement.

US equities extended previous losses, with the S&P 500 lower by 2.4 per cent. on the 10-year reference note below 1 per cent. Returns fall when prices rise.

Fed policy is on hold as it weighs equalization dynamics in the world's largest economy, with short-term data showing a difficult battle, but the medium-term outlook improves as a result of the increase in vaccinations.

Also on Wednesday, the Fed's New York arm announced that it would reduce its intervention in short-term loan markets, citing "sustained smooth functioning of short-term US dollar finance markets". It will continue to offer night loans in the repo market, but will stop a month's repo business after 9 February.

The Fed meeting this week came when Biden pushed for Congress to approve a fiscal stimulus plan of 1.9 tn in addition to the $ 900 bn already adopted by Mr. Trump last month.

Powell said it was "appropriate" for these discussions to take place, saying that the United States was "far from full recovery" – but he would not be drawn to prescribe any particular size or policy.


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