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14 of the 17 committee members are expected to remain by 2023
Expectations for this year’s economic growth rate -3.7% and the unemployment rate 7.6%
Powell’s concerns about “there is a long way to go to maximum employment”
Jerome Powell, president of the United States Central Bank (Fed). Photo = Reuters Yonhap News
On the 16th (local time), the US Central Bank (Fed) froze the interest rate again at the current 0.00 ~ 0.25%.
It has been suggested that this ‘zero interest rate’ stance will hold until 2023.
The Fed announced in a statement at a regular meeting of the Federal Open Market Committee (FOMC) that it would freeze the base rate at the current 0.00 ~ 0.25%. At the FOMC meeting on March 15, it was decided to freeze four consecutive times after lowering the standard interest rate by 1% p from 1.00 to 1.25% to 0.00 to 0.25% due to Concerns about the new coronavirus (Corona 19) pendemic (a pandemic).
On this day, the Fed predicted that the zero interest rate will remain until 2023. According to the separately disclosed dot plot, all 17 members, including non-voting FOMC members, expected to hold the current rate until next year. 16 respondents commented on maintaining zero interest rates until 2022 and 14 respondents until 2023, next year.
The US economic growth rate this year is -3.7% and the unemployment rate is 7.6%. Compared to the forecasts of -6.5% and 9.3% in June, it is read that expectations of an improvement in the economic situation are maintained despite the spread of the coronavirus.
Fed Chairman Jerome Powell told a news conference following the decision to freeze the base rate on the same day: “I hope to maintain the stimulus monetary policy stance until achievements such as maximum employment are achieved.”
“The job market is recovering, but there is a long way to go to maximum employment,” Powell said. “There are 11 million Americans who have lost their jobs because of the crown. The mission of the Fed is not to forget these people.” Did.
On this day, the Fed announced that the labor market had to reach a level consistent with the maximum employment assessment as a requirement to maintain a ‘zero ban’, and that inflation should gradually exceed 2% over a certain period of time at as the price rose to 2%.
In this regard, Powell said, “it will take time to get back to economic activity and employment levels at the beginning of this year,” he said. “A full economic recovery is unlikely to be achieved until people feel safe to engage in a wide range of activities again.” .
Conscious of this, the Fed also expressed its intention to support the economic stimulus through its own monetary policy. “We’re not going to tell ourselves we don’t have enough bullets,” Powell said, “we have a lot of media.”
Reporter Kim Min-seong, Hankyung.com [email protected]
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