“In practice, we say that interest rates will remain very helpful until the economy is on a long road to recovery,” central bank governor Jerome Powell said at a news conference.
The United States the central bank Fed promises to keep interest rates close to zero until inflation accelerates in line with the central bank’s interest rate target and employment rises.
The central bank kept interest rates unchanged near zero on Wednesday. At the same time, it issued a statement that the same line will hold until inflation has risen to its target of 2 percent and is about to exceed that level “moderately” for some time. The goal is for inflation to average 2% over the longer term.
“In practice, we say that interest rates will remain very helpful until the economy is on a long road to recovery,” the central bank governor Jerome Powell said at a news conference.
“This should be a very strong statement to support economic activity,” he said.
Fed forecasts inflation appeared to remain below the central bank’s target at least until 2023, by which time interest rates would remain low.
This is a change in the monetary policy stance, which was first announced in August. The aim is to get rid of years of low inflation and increase employment.
The Fed also said it will continue to buy government bonds at least at their current size, at $ 120 billion a month.
The U.S. economy is recovering, according to Powell, but the pace is expected to slow, which, according to Powell, will require further action from the Fed.