Here's What the Fed Said Today
On Wednesday, the Federal Reserve announced no change in interest rates and an unenthusiastic look on the economy, according to CNBC.
The federal funds rate remains near zero, where it has rested since March 15 during the beginning of the crisis in the US. The federal funds rate will remain between 0 and 0.25 percent until the central bank is “confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The decision to hold rates steady was unanimous.
The Federal Open Market Committee also announced that it would continue to purchase fixed income securities along with its other liquidity programs. “We are committed to using our full range of tools to support our economy in this challenging environment,” Fed Chairman Jerome Powell said.
“Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year,” the Fed's statement said. “Weaker demand and significantly lower oil prices are holding down consumer price inflation. Overall financial conditions have improved in recent months, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”
Financial markets seemed to have already priced in what the central bank had said and closed with significant gains. “In short, this is a holding operation, pending developments with both the virus itself and fiscal policy,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“The path of the economy will depend significantly on the course of the virus,” the statement said.