WASHINGTON–As expected, the Federal Reserve Board’s Open Market Committee left rates unchanged as the group wrapped up its two-day meeting Thursday.
The Committee decided to keep the target range for the federal funds rate at 0% to .25% and expects it will maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2%--and is on track to moderately exceed 2% for some time, the Fed stated in a release.
“In addition, over 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,” the Committee said.
The Fed added that the COVID-19 pandemic is “causing tremendous human and economic hardship across the United States and around the world. Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year. 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 U.S. households and businesses.”
The Committee 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 Fed stated.