Breaking News
Investing Pro 0

Fed Keeps Rates Steady, Signals No Hikes Through 2022

Economic Indicators Jun 10, 2020 03:01PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Yasin Ebrahim

Investing.com – The Federal Reserve kept rates unchanged Wednesday, and reiterated its commitment to maintaining easy monetary policy measures for some time.

The Federal Open Market Committee left its benchmark rate unchanged in the range of 0% to 0.25%. 

The low-rate environment will continue for some time, with policymakers backing rates to remain unchanged through 2022.  The Fed's interest-rate outlook for 2020, 2021 and 2022 was lowered to 0.1% from previous projections in December of 1.6%, 1.9% and 2.1% respectively, the Fed's Summary of Economic Projections showed.

"The committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals," the Fed said.

The decision comes as the central bank continues to roll out its lending programs to support the economy, which officially entered a recession in February, data earlier this week showed.

A surprise upturn in U.S. hiring in May, as reported last week, stoked some investor hopes that the economy is shaping up for a speedier recovery, but the Fed slashed its growth forecasts for the years ahead amid uncertainty over the impact from the pandemic. 

The economy is expected to contract by 6.5% in 2020, down from an estimate for 2% growth previously, but return to growth, albeit well below previous estimates, in 2021 and 2022. The Fed expects the economy to grow by 5% next year, and 3.5% in 2022, up from previous estimates of 1.9% and 1.8%, respectively.

The unemployment rate for the year is expected to come in at 9.3%, up from 3.5% previously, but eventually, fall to 5.5% by 2022.

The pace of inflation, which will continue to be the key driver for future monetary policy, is forecast to cool to a rate of 0.8%, down from 1.9% previously. While core-PCE inflation for 2021 was revised lower to 1.5% from 2%.

The wave of stimulus from the Fed has taken its balance sheet above $7 trillion from about $4 trillion just before the pandemic struck in the U.S. in early March. But the central bank has no plans to rein in quantitative easing, pledging to maintain the current pace of bond purchases over the coming months to support the flow of credit to households and businesses. Purchases over the coming months will be made across a range of debt including Treasuries, agency residential, and commercial mortgage-backed securities.

Fed Keeps Rates Steady, Signals No Hikes Through 2022
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (37)
Luke Aye
Luke Aye Jun 11, 2020 6:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What the Fed is happening here!?
Haresh Chandwani
Haresh Chandwani Jun 10, 2020 9:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold gold and gold.. buy as much as you can!Stocks? no comments!!!
Dion Argueta
Dion Argueta Jun 10, 2020 6:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I give it 2 to 3 weeks maximum and the market will be right back on track for recovery on good news or the fed putting in some more rescue stimulus. If not I will trade the downside with SPY Puts!!!!
Peter South
Peter South Jun 10, 2020 6:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Should be 1 or 2 weeks only. Impossible to go 3 weeks downward movement. We are going 3400 EOM.
Pwr Strk
Pwr Strk Jun 10, 2020 4:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
that's the way it's got to be
Joanna Yin
Joanna Yin Jun 10, 2020 3:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
no surprise to keep rate low until company can start payback debt
Andrew carson
Andrew carson Jun 10, 2020 3:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good and bad at the same time. I'll take the low rates but it doesn't show much faith in a quick recovery.
Thom Miller
Thom Miller Jun 10, 2020 3:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You must borrow a lot over an extended period of time to think this is a good thing....
Jeffery Robert
Jeffery Robert Jun 10, 2020 3:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Do you trade forex ?
NAUSHAD ALI ABEDI
NAUSHAD ALI ABEDI Jun 10, 2020 3:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dow is voletile Down sharply and Recover sharply.
Steven Rojo
Steven Rojo Jun 10, 2020 3:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
massive sell off
Show previous replies (1)
Steven Rojo
Steven Rojo Jun 10, 2020 3:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
jj mm not yet. it has to drop at least 20% then I buy
katya litski
katya litski Jun 10, 2020 3:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
1% not massive. remember those 4-5% drop days??
Steven Rojo
Steven Rojo Jun 10, 2020 3:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
wait for tomorrow and the rest of the month
jj mm
jj mm Jun 10, 2020 3:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
buy the machine is printing dollars limitless
Robert DZ the patterns
Robert DZ the patterns Jun 10, 2020 3:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Steven Rojo, how do you see that sell off? I'm actually waiting for a 10 or 12% correction
Chris Mallory
Chris Mallory Jun 10, 2020 2:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good. No rate hikes. BUY
Trevor Ribeiro
Trevor Ribeiro Jun 10, 2020 2:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wow and Trump said 2021 would be America best year in history....ha ha ha ha ha
Tan Yongjie
Tan Yongjie Jun 10, 2020 2:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bankrutp for usa in coming
Fabio Diego Huaman Cordova
Fabio Diego Huaman Cordova Jun 10, 2020 2:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hahaha
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email