Fed Leaves Interest Rates Near-Zero as Economic Recovery Slows
Federal Reserve officials left interest rates near-zero and pledged to continue making huge purchases of government-backed bonds as the central bank tries to help the United States economy weather the pandemic’s ongoing hit.“The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” the central bank’s policy-setting Federal Open Market Committee said in its January policy statement.Fed Chair Jerome H. Powell, speaking at a news conference on Wednesday, said the resurgence of the virus was “weighing on economic activity and job creation,” and that the economic outlook hinges crucially on the pandemic itself.“The path of the economy continues to depend significantly on the course of the virus,” Mr. Powell said, adding that “the path ahead remains highly uncertain.”The Fed chair noted that household spending on services “remains low” but said that spending on goods — which had helped drive the recovery this summer — “has moderated.”The glum assessment shows that the Fed still sees the pandemic-stricken economy falling far short of its two major goals: maximum employment and price stability. Its officials are hoping that by keeping credit cheap, they can boost demand in the economy and help to set the stage for a job market recovery while also shoring up price gains, which have been chronically weak.Besides leaving interest rates at rock-bottom, where they have been since March 2020, the Fed is buying about $120 billion in government-backed bonds each month. While most investors expect the purchases to slow eventually, Mr. Powell has been clear that the economy remains far from the central bank’s targets, that officials are not yet ready to change course, and that they will broadcast it when they do see some change coming.Business & EconomyUpdated Jan. 27, 2021, 1:51 p.m. ET“It’s just too early to be talking about dates,” he said. “When we see ourselves getting to that point, we’ll communicate clearly about it.”Fed officials have repeatedly stressed that they are just one part of the economic response to this crisis, and that Congress — which has the power to spend and provide targeted relief — plays a central role in helping to support the economy. As the recovery began to slow last year and lawmakers struggled to agree on another aid package, Mr. Powell and other Fed officials said publicly that additional stimulus was needed to help families and workers stay afloat and to prevent longer-term economic scarring.In his first news conference since lawmakers passed a $900 billion stimulus package in December, Mr. Powell demurred when asked whether the economy needed another round of fiscal support, saying it was up to Congress and the Biden administration to make that decision.But the Fed chair suggested more might be needed, saying a “key reason” for the strength of the economic recovery so far was a “strong and sustained” fiscal response from lawmakers.“We’re a long way from a full recovery,” he said, noting that nine million people remain out of work and that “many small businesses remain under pressure.”President Biden has proposed a $1.9 trillion stimulus package, but his administration must prepare the fine details and steer the legislation through Congress. That could be a challenge, as some Republican lawmakers revive concerns over the nation’s fast-growing debt and even some Democrats express concerns about another large package.Together with congressional relief packages, the central bank’s low rates have helped the economy avoid an even deeper slump during the pandemic downturn so far, including by fueling a robust housing market. The Fed also rolled out a sweeping series of financial market rescue programs last year, several of which remain in place. Those helped to keep credit flowing during the worst of the pandemic-related market turmoil.Some analysts have warned that the Fed’s policies are putting financial stability at risk, pushing stock prices higher and causing investors to seek out ever-sketchier assets as they try to find investments that offer higher payouts.“While there is for now no alternative to continued monetary policy support, there are legitimate concerns around excessive risk-taking and market exuberance,” International Monetary Fund officials warned in a blog post on Wednesday. “With investors betting on persistent policy backstop, a sense of complacency appears to be permeating markets.”
Good day! This is my first visit to your blog! We are a collection of volunteers and starting a new initiative in a community in the same niche. Your blog provided us useful information to work on. You have done a wonderful job!
how to hire a hacker
Wow, wonderful blog format! How lengthy have you been blogging for? you made blogging look easy. The total glance of your site is magnificent, let alone the content material!
best holiday videos
Good – I should definitely pronounce, impressed with your site. I had no trouble navigating through all the tabs as well as related information ended up being truly simple to do to access. I recently found what I hoped for before you know it in the least. Reasonably unusual. Is likely to appreciate it for those who add forums or anything, web site theme . a tones way for your client to communicate. Excellent task.
What’s Happening i am new to this, I stumbled upon this I have found It absolutely helpful and it has aided me out loads. I’m hoping to give a contribution & aid other customers like its helped me. Good job.
You should take part in a contest for one of the best blogs on the web. I will recommend this site!
cash app hack no human verification or survey 2021
Great work! This is the kind of information that are supposed to be shared across the net. Shame on the search engines for no longer positioning this post upper! Come on over and seek advice from my web site . Thank you =)
We’re a group of volunteers and opening a new scheme in our community. Your site offered us with valuable info to work on. You’ve done a formidable process and our entire community will likely be thankful to you.
I together with my buddies were examining the nice helpful tips found on the website and then came up with an awful suspicion I had not expressed respect to the blog owner for those techniques. My young men had been as a consequence glad to learn all of them and have seriously been having fun with them. Appreciation for being so kind as well as for pick out certain essential themes most people are really needing to discover. My personal honest regret for not expressing gratitude to you sooner.
look at this now
It¦s actually a cool and useful piece of info. I¦m happy that you simply shared this helpful info with us. Please keep us informed like this. Thank you for sharing.
How To Apply Essential Oils Topically
Great post. I am facing a couple of these problems.