September 24, 2020, 8:33

Federal Reserve Chief Powell Elaborates on Interest Rates Decision of Central Bank

Federal Reserve Chief Powell Elaborates on Interest Rates Decision of Central Bank

Earlier in the day, the Federal Reserve announced it will keep interest rates near zero for years until the US economy recovers from the effects of the novel coronavirus pandemic.

US Federal Reserve Chairman Jerome Powell gave a press briefing on Wednesday concerning the latest Fed statement on interest rates and the economic forecast.

According to Powell, the Fed expects to “maintain an accommodative stance of monetary policy” until the economy recovers from the COVID-19 pandemic, particularly when inflation rests above 2 percent “for some time” and there is maximum employment.

Americans May Need More Fiscal Support From Congress, Powell Says

Powell said that workers and employees in many spheres will likely to continue to struggle through the pandemic, adding that they anticipate more fiscal aid, and “the details of that are for Congress, not for the Fed”.

He added that “the overwhelming majority” of private forecasters expect additional fiscal stimulus.

Fed Has ‘Lots of Tools’ to Help Economy Recover

Asked if Americans could only expect coronavirus aid from Congress, the Fed chief said that the central bank does have the potential to support the US economy, including ‘lots of” lending tools, the Fed’s balance sheet, and forward guidance.

He added that the Fed thinks its rate policy is “powerful”, but they also have “the other margins” they can use.

Stocks Go Up Minutes After Fed’s Rate Decision

Following the Fed’s announcement on Wednesday afternoon, stocks went up to session highs, with the Dow Jones Industrial Average rising 290 points to trade at about 28,290. The S&P 500 also added 0.6 percent to reach 3,421, CNBC News said earlier. After Powell’s comments, the Dow rose even higher, gaining 350 points.

Later, however, tech stock losses drove the S&P 500 into negative territory, while the Dow still traded 100 points higher. The teach-heavy Nasdaq Composite dropped 0.8 percent.

In addition to the announcement, the Fed also issued new projections for the US economy, including a lower GDP and also a lower unemployment rate this year.

Source: sputniknews.com

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