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The Federal Reserve System (Fed), the US central bank, maintained a “zero interest rate” on the 16th (local time).
Until the economy made significant progress, it also decided to continue supporting financial markets, such as buying bonds. However, he also presented an optimistic outlook that the US economy will grow more than it originally was.
The Fed said in a statement issued after a regular two-day meeting of the Federal Open Market Committee (FOMC) that it would freeze the base rate at the current 0.00 ~ 0.25%. The decision was made with the unanimous approval of the members.
The same position was reaffirmed at this FOMC meeting, which was held for the sixth time since the zero interest rate was decided to respond to the new coronavirus infection (Corona 19) in March.
At the FOMC meeting on March 15, the Fed lowered the standard interest rate by 1 percentage point from 1.00 to 1.25% to 0.00 to 0.25%, as concerns about the economic downturn increased with force due to the worldwide Corona 19 pandemic.
In a statement, the Fed said in a statement that it would maintain the target range of 0.00-0.25%. I do, “he said.
The Fed explained that “economic activity and employment continue to recover, but well below the level of the beginning of the year.”
Several FOMC members predicted that zero interest rates would hold until 2023, Bloomberg reported.
The Fed also said it would continue to buy at least $ 120 billion in bonds each month until “significant progress” is made in the economy.
“These asset purchases help support the flow of credit to households and businesses by creating smooth market functions and an adjustable financial environment,” the Fed said.
Marketwatch said the Fed is buying $ 120 billion in bonds a month to keep interest rates extremely low. The announcement indicates that the Fed will buy bonds for longer than previously suggested. Said.
The AP interpreted the Fed’s policy as “a measure to calm the financial market and keep long-term interest rates low.”
The Fed has provided better forecasts for the US economic situation than before.
The Fed predicted this year’s economic growth rate (gross domestic product) at -2.4%. This increased slightly from the -3.7% suggested in September.
The growth rate for 2021 also rose to 4.2%, slightly higher than the 4.0% published in September. The projected growth rate for 2022 is also forecast to be 3.2%, slightly higher than the 3.0% in September.
The AP said: “The US economy is expected to improve next year,” the Fed said, while maintaining a zero interest rate and continuing to buy bonds.
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