Washington (AFP)

After lowering rates to zero and launching a whole range of initiatives to support the US economy in the face of the unprecedented coronavirus crisis, the Fed is holding a virtual monetary meeting on Tuesday and Wednesday, and should give its projections for the country .

The usual speculations on the rise or fall of key rates have been shelved. Rates are now close to zero, and should not move any time soon, with the Fed doing everything possible to avoid going into negative territory.

"We are here for years", even thinks Michael Feroli, chief economist of JP Morgan, believing that this meeting is likely to be "a meeting without event".

It is therefore rather the prospects of the Federal Reserve for the American economy that will shake up markets and observers.

"Things have deteriorated rapidly" and "the prospects for recovery are uncertain," said Diane Swonk, chief economist for Grant Thornton, who said "this is a major worsening of forecasts".

"I think they will say: + the economy is deteriorating at breakneck speed and the outlook is very uncertain +", commented Michael Feroli.

He feared, however, that the members of the monetary committee did not venture "to take a firm position on the economic outlook, partly conditioned by elements of public health beyond their control".

The last meeting of the Fed's monetary committee dates back to March 15. It was held on a Sunday, after having been urgently advanced by two days in the face of the advance of the virus on American soil.

Since then, the US economy has gone to sleep, more than 26 million people have registered as unemployed and the 53,000 mark of the Covid-19's death has been crossed on Saturday.

- "Wide variety of measures" -

In two months, the Federal Reserve launched an avalanche of measures, whether usual tools or novelties, in order to reassure the markets and give a breath of air to businesses and households.

"I think they will say that they have taken a wide variety of measures and are ready to take whatever is necessary as long as it is needed, that is, until that the economy has recovered, "said economist Joel Naroff.

After watering the liquidity markets and resuming massive bond purchases, the institution came to support the gigantic American plan to revive the economy, bringing fresh money to the banks that lend to small and medium-sized businesses. . It even created its own loan program for medium-sized businesses and local authorities.

"There are many questions about the various programs announced by the Fed, some of which have not yet started operations, such as the purchase of local government bonds," said David Wessel, monetary policy expert at the Brookings Institution.

The Fed cut rates twice in two weeks in early March, dropping it from 1.50% to 1.75%, to 0% to 0.25%.

Extremely rare, it had not even waited for its monetary meeting, which takes place every six weeks.

The gross domestic product of the world's largest economy could fall by almost 12% in the second quarter, before a timid recovery, according to an estimate published Friday by the services of the budget of the Congress, CBO, an independent agency. For 2020, the decrease could be 5.6%.

The International Monetary Fund, for its part, expects GDP to contract by 5.9% this year.

© 2020 AFP