The Federal Reserve Committee’s Open Market Operations Committee has decided that the key interest rate will remain in the range of zero to a quarter of a percentage point. The Fed thus confirmed its recent slight adjustment of the monetary policy regime.
It has been clear since the regular meeting of central bankers in the American town of Jackson Hole that the Federal Reserve will delay its inflation target for some time and will focus primarily on increasing employment. With its decision on Wednesday, the committee confirmed this slightly adjusted monetary policy rate.
It will hold a virtually zero interest rate until employment rises significantly and inflation returns to the 2% target. The Fed added that it will not bother him even if inflation in the coming months rises above two percent in the year-on-year comparison so that it even approaches the average level. According to some analysts, zero interest rates can be expected in 2023.
The Fed has also confirmed that it will continue to increase its holdings of government bonds or mortgage-backed securities, under the current scenario. The aim is to supply the necessary liquidity to both households and companies.
