The Federal Reserve pledged to maintain asset purchases at “at least” the present pace and projected interest rates will remain near zero through 2022 as policy makers attempt to support the economy’s recovery from the coronavirus recession.
“To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning,” the Federal Open Market Committee said in a statement Wednesday following two-day policy meeting.
A related statement from the New York Fed specified that the pace of the increase would be about $80 billion a month for purchases of Treasuries and about $40 billion of mortgage-backed securities.
The dollar remained lower on the day, while U.S. stocks jumped after the news of the Fed decision.
Read more: Bloomberg’s TOPLive blog on the FOMC decision and forecasts
The vote to keep the federal funds target rate in a range of 0% to 0.25% was unanimous. Chairman Jerome Powell will hold a press conference at 2:30 p.m. Washington time.
The Fed’s quarterly projections — updated for the first time since December, after officials skipped their March release amid the burgeoning pandemic — showed all policy makers expect the funds rate to remain near zero through the end of 2021. All but two officials saw rates staying there through 2022.
The economy faces “considerable risks” over the medium term, the Fed said in its statement, reiterating language from the last FOMC meeting in late April.
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