Federal interest rates will remain near zero, the Federal Reserve announced on Thursday.
The Federal Reserve will maintain its current course, keeping the federal funds rate at 0 to 0.25 percent. Following a the Fed’s policymaking committee, the Federal Open Market Committee (FOMC) issued a statement that it expects to continue its monetary policy until the United States hits long-term maximum employment metrics as well as an inflation rate of two percent.
The agency also plans to increase its holdings of U.S. Treasury securities and other agency mortgage-backed securities over the coming months in an effort to improve the “flow of credit to households and businesses” through more “accommodative financial conditions.”
In its statement, the committee noted that overall financial conditions in the United States were largely accommodative, but that the economy’s future was inextricably tied to the outcome of the COVID-19 pandemic.
“The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the committee wrote.
The Financial Times reported that Federal Reserve chairman Jerome Powell told reporters after the policy meeting that additional government support would be needed to help lift the economy up.
“All of us lived through the experience of the years after the global financial crisis, and for a number of years, there in the middle of the recovery, fiscal policy was pretty tight,” Powell said. “I think we’ll have a stronger recovery if we can just get at least some more fiscal support.”