The Fed made a decision on interest rates. The Federal Reserve has decided to keep them at zero. The exact range will be 0-0.25 percent.
Fed and interest rates
It is known that the Federal Open Market Committee (FOMC) made the decision unanimously. Everything happened without any surprises – this was what economists expected.
The Fed kept interest rates at this level also at the previous two meetings, which were held on June 10 and April 29. The revolution took place in March at an unannounced session on Sunday. Then the feet were cut by 100 bp. and was set at the zero ceiling. The QE program was also increased by $ 700 billion.
“The coronavirus outbreak causes enormous difficulties for people and the economy in the United States and around the world. After sharp declines, economic activity and employment have picked up somewhat in recent months, but remain clearly below their levels at the beginning of this year. Weaker demand and significantly lower oil prices hold back consumer price inflation. Overall financial conditions have improved in recent months, in part reflecting the monetary policy measures taken to sustain the economy and the flow of credit to US households and businesses. “
– Written in the July FOMC press release.
Purchase of bonds
From March to the end of June, the Fed also increased its balance sheet by $ 2.85 trillion. He bought bonds from the market, paid for with freshly printed money. Only in July the assets of the US central bank stopped growing, and even decreased by USD 117.5 billion.
Despite this, the FOMC announces that already in “Coming months” will increase holdings of Treasury bonds and mortgage bonds at a pace “At least like the present”.
“The future path of US GDP growth is extremely uncertain. The current increase in the number of coronavirus cases is a burden on the economy “
– Fed chairman Jerome Powell said at a recent press conference.
The next Fed leadership meeting is scheduled for September 15-16. However, the market does not expect any changes in the level of interest rates. Economists hope that this will not change until March 2021.
However, if the reprint is continued, they may benefit from it, among others kryptowaluty …