Federal Reserve Will Keep Interest Rate Near Zero
In an attempt to revive the economy and the labor market, the Federal Reserve chair, Jerome H. Powell, said the Fed plans to keep interest rates near zero through at least 2023.
Before describing today’s policy actions, let me briefly review recent economic developments. Economic activity has picked up from its depressed second-quarter level, when much of the economy was shut down to stem the spread of the virus. With the reopening of many businesses and factories, and fewer people withdrawing from social interactions, household spending looks to have recovered about three-quarters of its earlier decline. The recovery has progressed more quickly than generally expected, and forecasts from F.O.M.C. participants for economic growth this year have been revised up since our June summary of economic projections. Even so, overall activity remains well below its level before the pandemic, and the path ahead remains highly uncertain. With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current zero to one-quarter percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment, and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.
In an attempt to revive the economy and the labor market, the Federal Reserve chair, Jerome H. Powell, said the Fed plans to keep interest rates near zero through at least 2023.CreditCredit…Jacquelyn Martin/Associated Press