The Federal Reserve Keeps The Target Range Of The Federal Funds Rate Unchanged

The Federal Reserve announced on the 29th that it would maintain the target range of the federal funds rate between 0-0.25%, in line with market expectations. At the same time, the Federal Reserve reiterated that the U.S. economic outlook will largely depend on the development of the new epidemic.

The US Federal Reserve issued a statement after the two-day monetary policy meeting that in recent months, the US economic activity and employment have rebounded after experiencing a sharp decline, but they are still far below the level at the beginning of the year. At the same time, weak demand and a sharp drop in oil prices inhibited the rise of consumer prices. Future economic development will largely depend on the development of the epidemic. The sustained public health crisis will seriously affect economic activities, employment and inflation in the short term, and pose considerable risks to the economic prospects in the medium term.

The statement said the Federal Reserve will maintain ultra-low interest rates until it is convinced that the economy has passed the crisis and is on track to achieve the two major objectives of maximum employment and price stability. At the same time, the Federal Reserve will continue to monitor the impact of the epidemic situation and relevant information such as economic data on the economic outlook, and is committed to using all tools and taking appropriate actions to support the economy.

On the same day, the Federal Reserve also extended the temporary US dollar liquidity swap agreement and the temporary repurchase agreement tool for foreign central banks and international monetary authorities to March 31, 2021. These two credit mechanisms were set up in March this year to ease the pressure on domestic and foreign markets.

US Federal Reserve Chairman Colin Powell said at the same day's news conference that the US economic outlook is full of uncertainty, and the economic prospect will largely depend on whether the epidemic can be successfully controlled. In recent weeks, new measures to control the spread of the epidemic have increased in the United States. To support the economic recovery, the Fed has committed to using all credit and liquidity instruments. At the same time, fiscal policy is also crucial and will play an irreplaceable role.