According to the results of the meeting on April 28-29, the US Federal Reserve System (FRS) kept the base interest rate at 0-0.25% per annum, the regulator said in a press release. The decision coincided with the forecasts of most analysts.
The regulator kept the base rate after it unscheduled twice in March to the level of 0-0.25% per annum. At this level, the rate was previously in the period from December 2008 to December 2015.
The Fed has decided to lower rates in response to the dire economic consequences of an outbreak of coronavirus.
“The outbreak of coronavirus caused severe … economic difficulties in the US and around the world. The virus and measures are taken to protect human health lead to a sharp decrease in economic activity,” the regulator said. At the same time, inflation is constrained by weak demand and a strong drop in oil prices, the regulator notes.
The crisis in the health sector will significantly affect economic activity, employment, and inflation in the short term, it also poses significant risks for the economic forecast in the medium term, the central bank said.
- THE ECONOMIC CRISIS 2020-2022
- CHINA’S INDUSTRY INCURS UNPRECEDENTED LOSSES
- FED IS PREPARING A COLLAPSE OF THE DOLLAR BY THE END OF THE YEAR
- THE NEGATIVE BALANCE OF FOREIGN TRADE OF ARMENIA DECREASED IN THE FIRST QUARTER OF 2020 BY 13.4% PER ANNUM
The further direction of monetary policy will be determined to take into account many factors, including the state of the labor market, inflation expectations, and international events.
The Fed will continue to buy back mortgage and treasury bonds in the quantity necessary to support the market.