China News Service, New York, April 28. The US Federal Reserve Board announced on the 28th that it would maintain the target range of the federal funds rate unchanged at 0-0.25%, in line with market expectations.
The Federal Reserve issued a statement after the two-day regular monetary policy meeting, stating that the Federal Reserve is committed to using all tools to support the US economy during this challenging period to promote the goal of full employment and price stability.
The statement said that with the advancement of vaccination and the support of strong policies, economic activity and employment indicators in the United States have strengthened.
The inflation rate has been rising, largely reflecting temporary factors.
The statement said that the development of the US economy will depend to a large extent on the results of the epidemic prevention and control, including the progress of vaccination.
The current public health crisis continues to suppress economic activity, and the economic outlook remains at risk.
The Federal Reserve stated that it is appropriate to maintain the target range of the federal funds rate between 0-0.25% before the labor market reaches full employment and the inflation rate rises to 2% and is expected to moderately exceed 2% for a period of time.
The Fed also stated that it will continue to maintain its current asset purchase portfolio, that is, increase its holdings of US Treasury bonds at a rate of at least US$80 billion per month, and purchase institutional mortgage-backed securities at a rate of no less than US$40 billion per month.
On the same day, Fed Chairman Powell stated after the regular monetary policy meeting that it is appropriate to maintain the current interest rate before the assessment shows that economic growth has made significant progress, and the Fed will adhere to the current loose monetary policy.
Powell said that although the current inflation rate is rising, it may not be sustainable because the labor market is still weak, which is a drag on the US economy.
The Wall Street Journal quoted analysts as saying that Fed officials have repeatedly stated that they can tolerate the inflation rate temporarily and moderately exceeding 2%. What they need to see is the substantial progress reflected in the economic data.
Therefore, the Fed will not raise interest rates or reduce the scale of debt purchases until economic growth actually reaches its employment and inflation targets.