WASHINGTON–As expected, the Federal Reserve’s Open Market Committee has adjourned its two-day meeting without making any changes to rates—but it did indicate it sees brighter economic days ahead.
“The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the Fed said. “Inflation continues to run below 2%. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
“The path of the economy will depend significantly on the course of the virus, including progress on vaccinations,” the FOMC statement continued. “The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.”
As it has following recent meetings, the Fed said that with inflation below its 2% goal it will endeavor to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer‑term inflation expectations remain well anchored at 2%.
“The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” it said.
Target Range Unchanged
As a result, the FOMC said it is keeping the target range for the federal funds rate at 0% to .25% and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.
In addition, the Federal Reserve said it will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals.
“These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the Fed said.
Social Studies Social Security 101 The US Social Security system is best known for providing income to the nation’s elderly population based on the amount of money they earned during their working years. The Social Security Act of 1935 established the program amid the worsening poverty crisis that older Americans faced during the Great Depression. By 1934, more than half of those aged 65 and older lacked sufficient income to cover their basic living expenses. Today, most US workers are familiar with seeing a percentage of their pretax income deducted from their paychecks and contributed to the nation’s Social Security trust funds. Starting a...
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