US Federal Reserve Forecast Shows US Interest Rates Could Remain Near Zero Through 2023
Faizan Hashmi 3 days ago Thu 17th September 2020 | 02:10 AM
WASHINGTON (UrduPoint News / Sputnik - 17th September, 2020) US interest rates may remain near zero over the next three years as the country tries to get the economy back on track from the coronavirus pandemic, a Federal Reserve forecast showed.
The Fed, which left rates unchanged in a range of zero to 0.25 percent at the conclusion of its September policy meeting on Wednesday, also published a forward guidance table that forecast no expected change in the rate regime until 2023.
"Effectively, we're saying that rates will remain highly accommodative until the economy is far along in its recovery and that should be a very powerful statement in supporting economic stability," Fed Chairman Jay Powell told a news conference, elaborating on the forecast.
"Now we're buying $130 billion a month across Treasury (bills). We do have the flexibility to adjust that tool and rate tool and others as well but as for right now, we think that our policy setting is appropriate to export the expansion."
The US economy shrank at its fastest pace in history in the second quarter of 2020, contracting by 32.9 percent amid lockdowns due to the pandemic. While some economic and labor market data have since been encouraging, overall recovery has been spotty.