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Fed Plans To Keep Its Key Interest Rate Close To Zero Until The End Of 2023
Fed plans to keep its key interest rate close to zero until the end of 2023. That comes from a forecast published by the Fed.
Yazar: Tom Roberts
Yayınlanma: 17 Eylül 2020 21:34
Güncellenme: 23 Aralık 2024 05:09
Fed Plans To Keep Its Key Interest Rate Close To Zero Until The End Of 2023
The US Federal Reserve (Fed) plans to keep its key interest rate close to zero until the end of 2023. That comes from a forecast published by the Fed. The central bank also left the interest rate unchanged on Wednesday. The reason given was that the money market committee was assuming that this interest rate level would be maintained until the goals of full employment and an inflation rate of around two percent were achieved. The Dow Jones index rose on the US stock exchange. Because stocks remain one of the most lucrative investment opportunities for a long time to come. At the same time, the central bank raised its economic forecasts significantly. For this year, the central bank expects the economy to shrink by 3.7 percent due to the corona crisis. In June, a drop of 6.5 percent was feared. The forecast for the unemployment rate is also more optimistic. It should fall to 7.6 percent by the end of the year, after a forecast of 9.3 percent in June. The Fed expects an unemployment rate of 5.5 percent by the end of 2021. However, that would also be significantly higher than before the escalation of the corona pandemic. In February the rate was still at a very low 3.5 percent. It was the first monetary policy meeting of the US Federal Reserve after its strategic shift. The Fed also reiterated that it was determined to use the full range of its instruments. To combat the consequences of the corona pandemic, among other things, it had already launched extensive loan programs to support the economy. It left its key interest rate in a range between zero and 0.25 percent. With its recently changed strategy, the Fed has given itself more leeway when aiming for its inflation target. It could now keep the rate of inflation above the targeted optimum value of two percent for a longer period of time if it had previously remained below it for a considerable time. The goal of full employment should come first. After the severe slump as a result of the virus crisis, the US economy is still miles away from that, although the unemployment rate had recently surprisingly fallen to 8.4 percent.İLGİLİ HABERLER
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