FED Keeps Interest Rates Near Zero
On Wednesday, as expected, the Federal Reserve kept short term interest rates near zero.
The FED cut rates to this level back in March and expects to maintain rates at these low levels for potentially several years as the economy recovers from the Coronavirus pandemic.
The FED has also launched several lending programs and other stimulus efforts this year in an effort to help support the economy.
Said the FED in a statement, “Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year...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.”
Despite the difficulties the economy is facing, the FED is slightly more optimistic about 2021. It anticipates a 4.2% rebound in the gross domestic product in 2021, up slightly from the 4% rebound it predicted back in September. There is also growing optimism that a new stimulus bill will pass before the end of the year.
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