The Federal Reserve acknowledged strengthening the US economy but kept the interest rate unchanged

Facade of the Federal Reserve Building in Washington, D.C. (REUTERS / Brendan McDermid / File)

Federal Reserve of the United States This Wednesday maintained current interest rates (between 0% and 0.25%) and monthly bond buying programs, Acknowledging the economy’s growing strength, but without giving any indication it is ready to start reducing its support for the recovery.

“With the advancement of vaccination and the availability of strong policy support, indicators of economic activity and employment have been strengthened,” The US central bank said in a unanimous policy statement at the end of the two-day meeting.

however, “The course of the economy will depend greatly on the course of the virus, including progress on vaccination.”The Fed said: “The current public health crisis continues to weigh on the economy and risks to the economic outlook remain.”

Comments on the virus reflected a slightly less negative view of the Fed’s description in March, when it said the health crisis “poses significant risks to the economic outlook”.

Despite the recovery in the economy, the Fed repeated the directive it had used since December toOr what should happen before you consider the possibility of withdrawing the crisis support measures that were taken at the beginning of the epidemic.

Federal Reserve Chair, Jerome Powell (EFE / EPA / AL DRAGO / POOL / File)
Federal Reserve Chair, Jerome Powell (EFE / EPA / AL DRAGO / POOL / File)

This includes prof “Substantial additional progress” toward inflation and employment targets Before reducing your monthly bond purchases.

Federal Reserve Chairman Jerome Powell is due to hold a press conference at 18:30 (GMT) to further clarify the statement and the central bank’s views on the improved economic outlook.

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Job growth accelerated The Fed expects inflation to rise to the 2% target over time, Which would allow the central bank to cut $ 120 billion from monthly bond purchases, and in the end Raise the interbank interest rate from the current level near zero.

But even that first step to reducing bond purchases is likely to come in a few months’ time, and the Fed provided no indication of any rally.

The economy is still recovering from the 8 million jobs it lost due to the health crisis This forced entire industries to close to limit the spread of the Coronavirus.

Vaccination contributed to expectations of rapid economic growth this year, but the Federal Reserve acknowledged that it will depend on continued progress in managing the epidemic.

With information from Reuters and Agence France-Presse

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Myrtle Frost

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