Federal Reserve officials quelled fears on Wednesday as they confirmed plans to keep interest rates near zero for years, according to The Wall Street Journal. At the virtual news conference, Fed Chairman Jerome Powell said, “We are strongly committed to using our tools to do whatever we can and for as long as it takes to provide some relief and stability.”
After the news, the S&P 500 posted gains, but soon fell .05 percent, at 3190.14. The Treasury’s 10-year yield also dropped, falling 0.1 percent to 0.728 percent. Out of the participating 17 rate-setting meetings officials, all project steady rates around zero next year, and 15 estimated those rates reaching 2022.
Mr. Powell added, “We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates.”
Wednesday’s news conference also revealed a policy change affirming a continuation of the current pace of purchases of Treasury and mortgage securities. Speaking on May’s jobs report, Mr. Powel said, “(Last week’s report) was a welcome surprise. We hope we get many more like it, but I think we have to be honest, that it’s a long road.” Referring to significant changes in consumer demand and spending, Mr. Powell expressed concerns about the 20 million Americans currently unemployed, stating that many industries and jobs could disappear.
“It could be some years before we get back to those people finding jobs,” Mr. Powel said. “We’re doing a fair job of getting through these first few months, more than a fair job. The question, though, is that group of people who won’t be able to go back to work quickly—what about them?”