Tricky location – US Central Bank signaled zero interest rates until the end of 2022Aufgrund the corona crisis and the shrinking economy performance will remain the Fed’s monetary policy – and in the future continue to around 120 billion dollars in the market pumps. 0 KommentareDas Eccles building in Washington, where the Fed has its headquarters.

The U.S. Federal reserve will continue its zero interest rate policy due to the Corona-crisis expected to be still for a long time. This is evident from new interest-rate forecasts of the Central Bank released after its meeting on Wednesday.

Thus, most of the monetary policy decision-makers from the go until the end of 2022, the current interest is to maintain the level of almost zero percent.

The Corona-crisis will continue to weigh on the economy, the labour market and Inflation, said the Fed. There are significant economic risks exist. For this year, the Central Bank expects the economy will shrink by 6.5 per cent, followed by growth of 5.0 percent in the coming year. The unemployment rate is expected to amount this year to 9.3 percent, and in 2021 to 6.5 percent decline. The Inflation is forecasted to be up to 2022 under the objective of the Fed of 2 percent.

Unprecedented reaction

The Fed has lowered it since the Spread of the Corona-crisis on the United States in March in two big steps to almost zero percent. At the beginning of March the Prime rate was between 1.50 and 1.75 per cent.

The previous reaction of the Fed to the Corona-crisis is unprecedented, and makes even her Intervention in the financial crisis in the shadows. In addition to interest rate cuts, purchases of securities on a large scale were made and a number of credit programmes to support the economy.

The Fed, the extent of their purchases of securities specified now to stimulate the economy. The Fed of New York, for the settlement of the purchases, announced to invest about 80 billion US dollars per month in American government bonds. Around 40 billion dollars per month to be invested in mortgage-backed securities (MBS).


comments please Log in to comment