The Fed sees near-zero interest rates lasting through 2022 to curb the coronavirus' economic damage
- The US Federal Reserve held interest rates near zero on Wednesday after a two-day FOMC meeting.
- The majority of policymakers expect historically low rates to last through 2022, according to a press release.
- The central bank also set a floor for its asset purchases, pledging to take in at least $80 billion in Treasurys every month along with $40 billion worth of mortgage-backed securities.
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The US Federal Reserve held interest rates near zero and expects to maintain that level until the end of 2022, the central bank said in a Wednesday press release.
All members of the Federal Open Market Committee expect the rate to remain near zero through 2021. All but two policymakers see rates staying at historic lows through the following year. The projections are the Fed's first since December.
The group also set a floor for its asset purchases, guaranteeing it will take in at least $80 billion in Treasurys each month as well as $40 billion worth of mortgage-backed securities.
"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, thereby fostering effective transmission of monetary policy to broader financial conditions," the committee said in a statement following its two-day meeting.
The central bank lowered its benchmark interest rate to a range of 0% to 0.25% in mid-March in one of its first moves to pad against the coronavirus pandemic's economic toll. The Fed followed up its rate cuts with unprecedented lending programs extending credit to corporations, households, and municipalities.
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