The Fed does not change its monetary policy. Interest rates remained at 0-0.25 percent The decision was taken unanimously. In addition, there are other elements regarding the continuation of the recently chosen road.
Fed: interest rates must remain low
– The outbreak of the coronavirus causes enormous difficulties for people and for the economy in the United States and around the world. The virus and measures taken to protect public health result in a sharp decline in economic activity and a wave of lost jobs. Weaker demand and significantly lower oil prices hold back inflation consumer prices. Disruptions in economic activity in the country and abroad significantly affected the financial conditions and weakened the inflow of credit to American households and enterprises – now states the United States Central Bank.
It was further added that:
“The Committee expects to maintain the current level of federal funds rate until it is sure that the economy has shaken off recent events and that it is on the path to achieving the goals of maximum employment and price stability.”
Purchase of bonds
At the same time, the Committee assured that in order to maintain the credit inflow to the economy, it would continue to buy Treasury bonds and other securities in “The quantities needed to maintain a smooth market operation”.
“It’s a promise to keep printing money (QE) in unlimited quantities and for an unlimited time. Repo operations increasing liquidity on the interbank market will also continue. “
– judges today bankier.pl.
– Economic activity in the second quarter will probably fall at an unprecedented pace (…) The April labor market report will probably show a double-digit unemployment rate, although it was 3.5% two months ago and was at its lowest level in 50 years – said during the press conference the chairman of the Federal Reserve Jerome Powell.
We would like to remind you that the next Fed meeting is scheduled for June 9-10. Experts, however, do not wait impatiently for they do not expect any change in the federal funds rate for at least the next year. This assessment of market sentiment is based on the FedWatch Tool calculations.
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