The Federal Reserve has declared its commitment to using its full range of tools to support the American economy in this challenging time, thereby promoting its maximum employment and price stability goals.

Though the COVID-19 pandemic continues to cause tremendous hardship globally, economic activities and employment have moderated in recent months, with the Federal Reserve admitting today that the fall in demand and previous decline in oil prices continues to hold down consumer inflation.

Additionally, the Federal Reserve noted that overall financial conditions remain accommodative, partly attributable to the support of policy measures to assist the economy and the flow of credit to U.S. households and businesses.

According to the United States’ Central Bank, “the future of the economy will depend significantly on the course of the virus, including progress on vaccinations”.

The Federal Reserve, in its latest policy statement, committed to seeking to maintain employment and inflation at the rate of two per cent over the longer run and plans to maintain an accommodative stance with monetary policy until these goals are achieved.

The Federal Reserve reported that, “the committee decided to keep the target range for the federal funds rate at 0 to 1/4 per cent and expects it will be appropriate to maintain this target range until labour market conditions have reached levels consistent with the Committee’s assessments”.

Furthermore, the Federal Reserve will continuously increase its holdings of Treasury securities and agency mortgage-backed securities over coming months to foster smooth market functioning and accommodative financial conditions, to support the flow of credit to households and businesses. The Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy if necessary.