The Federal Reserve in its decision on Thursday set a short-term orrowing rate close to zero that showed the economy was growing but not as close as it was before the coronavirus epidemic hit.
As per the broader expectation of the markets, the Fed kept its benchmark interest rate between 0% -0.25%, which has been the case since the crisis was cut seven months ago in the early days of the coronavirus epidemic.
The statement following the Federal Open Market Committee meeting made some changes to the language, although the panel noted that the economy has continued to struggle.
Economic activity and employment have improved, but remain below their levels at the beginning of the year, the statement said.
The language is a slight downgrade in a September statement that noted that economic activity has “taken off in recent months.”
Stocks continued their uptrend when kets were low and markets reacted slightly to the news.
The Fed’s continued decision comes amid concerns about the direction of the economy as the Covid-19 case accelerates and public officials consider restrictions on activities that hinder growth. As it has done many times before, the Fed stressed that the path of growth is largely based on the path of the coronavirus.
The Fed has called for the use of favorable policy to stimulate growth, although officials have warned in recent months that more work needs to be done on the financial side.
The committee also adjusted its own view on the financial situation, saying Thursday that it “remains correct,” contrary to the September assessment that conditions have “improved.”
In the third quarter, U.S. GDP grew at its fastest pace ever, up from .41.4% in the previous period to an annualized growth of .31.3.1%. The economy has recovered 11.4 million of the 22 million jobs lost in March and April, but payroll growth has slowed in recent months and is expected to reach 530,000 in October.
However, to provide more financial assistance for the closure of negotiations in Congress and the White House. If the election results, if they expect a lot of partners, it will mean spending on the lower side closed by various proposals.
The Fed’s decision was unanimous at the meeting, although it did not happen in September, when two members objected to the new approach to inflation, saying it would stop the rate hike until inflation comfortably falls above the 2% target.
The statement made no change to the new approach to “targeting flexible average inflation”, an effort by the Fed to get the mandate, which has been low over the last several dozen years. A key element of the new approach is the pledge not to raise rates even if unemployment falls sharply, which was taken as a key indicator of rising inflation in the past.
Previous feeds have used preemptive increases to prevent price pressures, but that will not happen under the new regime.
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