In its statement, the Federal Reserve indicated a possible slowdown in the pace of the recovery.
“The pace of recovery in economic activity and employment has slowed in recent months, and the weakness has focused in the sectors most affected by the epidemic,” the Federal Reserve said on Wednesday in its monetary policy statement released at the end of the two years. Day meeting.
The fact that the statement focused on the possible moderation of the recovery gives more weight to the Fed’s promise to keep monetary policy in an “expansionary” position for what may be months or even years.
“The ongoing public health crisis continues to weigh on economic activity, employment and inflation, and pose significant risks to the economic outlook,” the agency added.
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Although the vaccination program may help re-open the economy and a full recovery later this year, Fed officials now argue that the United States remains in a deep hole, with high levels of unemployment, difficult small business, and health crises. It requires an adequate level of response from the central bank.
Fed Chairman Jerome Powell will hold a press conference at 7:30 pm. GMT (1:30 PM at CDMX) as it is expected to confirm that the central bank is not planning changes in monetary policy until it becomes clear that the economy is showing a sustainable improvement.
The United States lost jobs in December and many indicators of employment and spending have stalled since coronavirus infections began to spike in the fall.
The Fed’s statement promised to leave the bond-buying program as it is until there is “more substantial progress” toward the recovery, and interest rates are close to zero until inflation hits the 2% target.
With information from Reuters.