JAKARTA (TheInsiderStories) – The Federal Open Market Committee (FOMC) held its Fed Fund Rate (FFR) at 0.25 percent in their latest meeting on Thursday (11/05). The policymakers also committed to using its full range of tools to support the United States (US) economy in this challenging time.
“(We) decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee’ assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” said the governors in an official statement.
In addition, over the coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
“Over coming months the Fed will increase its holdings of treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” said the statement.
According to board of the governor, the pandemic is causing tremendous human and economic hardship across the US and around the world. Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year.
While, weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to US’ households and businesses.
It said, the path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.
The committee also committed to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Fed expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.
Jerome Powell, the chairman, stated, in assessing the appropriate stance of monetary policy, the Fed will continue to monitor the implications of incoming information for the economic outlook. The committee, he said, would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee’ goals.
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