The Federal Reserve held short-term borrowing rates near zero in a decision Thursday that characterized the economy as growing but not near where it was before the coronavirus pandemic hit.
As markets widely expected, the Fed kept its benchmark interest rate anchored in a range between 0%-0.25%, where it has been since an emergency cut seven months ago in the early days of the coronavirus pandemic.
Chairman Jerome Powell noted, however, that he thinks the Fed still has plenty it can do to help the recovery.
“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the statement said.
Markets reacted little to the Fed news, with stocks continuing their rally while the dollar was lower.
The Fed’s decision to hold steady comes amid concerns over the direction of the economy as Covid-19 cases accelerate and public officials contemplate restrictions on activities that could hamper growth. As it has done multiple times before, the Fed emphasized that the growth trajectory is largely dependent on the path of the coronavirus.
The Fed has sought to use accommodative policy to stimulate growth, though officials have warned in recent months that more needs to be done on the fiscal side.
Reference: CNBC
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