Sep 16, 2020 at 18:19 UTCUpdated Sep 16, 2020 at 18:50 UTC
Federal Reserve Chair Jerome Powell speaking at virtual press conference on Wednesday. (Federal Reserve, modified by CoinDesk)
Federal Reserve officials said Wednesday they would hold U.S. interest rates at close to zero and work to push inflation above 2% “for some time.”
- Federal Open Market Committee keeps interest rates unchanged close to zero, according to its statement.
- Panel agrees to maintain accommodative monetary policy until inflation climbs above 2% “for some time.”
- The central bank will increase holdings of U.S. Treasury securities and mortgage-backed securities “at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions.”
- Projection materials released with the statement show officials, on average, expect rates to remain close to zero through 2023.
- On average, officials don’t expect 2% inflation until 2023.
- Robert Kaplan, president of the Federal Reserve Bank of Dallas and a voting member of the panel, voted against the plan. He “prefers that the Committee retain greater policy rate flexibility.”
- Neal Kashkari, president of the Federal Reserve Bank of Minneapolis, also cast a dissenting vote. He prefers that interest rates stay on hold “until core inflation has reached 2% on a sustained basis,” according to the statement.
- Economists weren’t expecting Fed officials to make any changes to U.S. interest rates – which in March were cut close to zero on an emergency basis – as the devastating economic toll of the coronavirus started to become clear.
- Last month, Fed Chair Jerome Powell said in a speech that officials plan to let inflation rise above 2% and stay there for a while to keep borrowing conditions easy for a longer time and allow the economy to heal.
- “The Fed kind of kicked the door open at their last meeting by indicating a more aggressive approach to inflation,” Mati Greenspan, founder of the cryptocurrency and foreign-exchange firm Quantum Economics, told subscribers in an email on Tuesday, a day before the Fed announcement. “Of course, now that they have everyone’s attention, followup will be critical.”
- Bitcoin’s price was trading at around $11,022.90 at press time, up 2.4% in the past 24 hours. The price moved temporarily to $11,071.33 right after the Fed’s release.
- The S&P 500 Index was up 0.35%.
Read more about…
Federal ReserveBitcoinEconomy
Disclosure
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Leave a Reply