The Fed expectedly kept the benchmark interest rate at 0-0.25% per annum at the end of its last meeting, 16-17 March. Furthermore, the regulator announced that it plans to continue asset purchases (also as an element of soft monetary policy) at a rate of 120 billion dollars per month until significant progress is made towards employment and inflation targets. The next meeting is scheduled for 27-28 April.
Powell also reiterated that the Fed would wait for inflation at 2% and a full recovery of the labour market (these are the Fed’s two official targets under its “mandate”) before it tightens monetary policy. And, according to him, such a recovery is unlikely to occur before 2022.
As part of its March meeting, the Fed projected that the rate would remain at the current 0-0.25% per annum until 2023. “Most committee members didn’t see (in their forecasts – ed.) a rate hike until 2024, but that’s not a committee forecast… it’s just an estimate. The markets are paying too much attention to what we call economic forecasts and I would focus more on (economic growth – ed.) outcomes,” Powell said.
source: cnn.com
