The Fed did not change interest rates – Bloomberg HT

While the Federal Reserve Fed kept the interest rate stable in line with expectations, Fed Chairman Powell gave the message that the increase in cases is alarming.

According to the bank’s statement, federal funding rates remained unchanged and remained within the target range of 0 – 0.25%. Interest on excess reserves was also left at 0.10%. The Fed also did not change its asset purchase program. There was no change of interest from the bank.

At its September 15-16 meeting, the Fed signaled that it will keep interest rates stable until at least 2023 to help the US economy recover from the pandemic woes.

Bond purchases will continue at the current pace

Although the decision was made unanimously, the Fed reiterated its determination to use all means to support the US economy and said bond purchases would continue at the current pace.

In the statement released by the Fed, it was emphasized that weakening demand and low energy prices keep inflation low, verbal indications continue in supportive monetary policy, the pandemic poses a significant risk on the economic outlook and the path of economic recovery depends on the course of the coronavirus pandemic.

In the statement, which states that economic activity and employment continue to recover, the level of the economy is compared with pre-pandemic levels. under and the pandemic will impact activity, employment and inflation in the near future.

Fed Chairman Powell: The increase in new cases is alarming

After the decision, Fed Chairman Powell told the meeting that he believed the bottom-up recovery of the economy accelerated with the reopening.

Powell said the increase in new cases is alarming. Stating that the pandemic had a severe impact on inflation, Powell said it is not possible to fully recover until people feel safe from the outbreak. Expressing that he does not expect further restrictions from the government, Powell said the new wave is more common in the epidemic and that consumers can delay their consumption.

Expressing that they believe bond buying programs support the economy, Powell stressed that they will continue to review their asset purchases. Powell said they could change the composition, duration and volume of their bond purchases.

Claiming federal subsidies support the bottom line return in household consumer spending, Powell said spending in the services sector remained low. President Powell stressed that more financial and financial support is likely to be needed.

Powell reiterates the call for financial support

Fed Chairman Powell echoed his messages on financial support in the meeting’s question and answer session. Powell said financial support could have the effect the Fed could not have on the revenue side, the more financial support the recovery could be stronger.

By stating that fiscal policy is the primary policy, Powell gave the message that monetary policy is in control. Stating the recovery is better than expected, Powell said he was still far from targets.

“We haven’t decided to extend emergency credit lines after December 31, this is a decision we can make with the Treasury Department,” Powell said.

“We were not at the center of the choice”

Fed Chairman Powell also answered questions about the US presidential election. Powell said the elections were not the focus of the meeting and said the institutions of democracy should be allowed to work.