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The forecast for economic growth this year has been raised from -3.7% to -2.4%.
▲ FRB President Jerome Powell attends the Senate Finance Committee held in Congress in Washington on September 24 (local time) and gives a response. Washington DC / AP Newsis
The Federal Reserve System (Fed) unanimously froze the benchmark interest rate at the last Federal Reserve Board (FRB) this year. The policy is to keep buying bonds until the employment situation fully recovers.
On the 16th (local time), the Fed made such a statement in a statement after the regular FRB meeting. The current benchmark interest rate (0.00 ~ 0.25%) is practically zero, and has been held six times in a row after lowering the interest rate after the novel coronavirus (Corona 19) infection in March.
The Fed said: “Even if the unemployment rate falls to the level of signs of inflationary pressure, it will not raise interest rates until inflation exceeds the 2% target.”
He added, “We will buy at least $ 120 billion (about 131 trillion won) of bonds per month until there is ‘further substantial progress’ on our goal of getting jobs back and stabilizing prices.” It was revealed that bond buying will continue for a considerable period of time by changing the guidance for bond buying, which had been limited to “for the next several months”, more comprehensively. However, he did not mention the change in the purchase period and the settings.
Fed Chairman Jerome Powell said in a press conference after the meeting that “this move will ensure that monetary policy will continue to provide strong support until the economic recovery is complete.”
Bloomberg said: “The Fed’s decision came at a time when the US Congress showed signs of an end to the stimulus package deal, which had been stalled for several months.”
The growth rate for next year is 4.2%, higher than the level suggested in September (4.0%). The forecast for 2022 went from 3.0% in September to 3.2%. This year’s economic growth rate also rose to -2.4% from negative 3.7% in September.
The Fed warned: “Economic activity is recovering, but it is still well below pre-epidemic levels.” .
