US Fed keeps interest rates near zero amid Covid-19 resurgence

WASHINGTON, July 10, 2019 (Xinhua) — U.S. Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee on the state of the U.S. economy, on Capitol Hill in Washington D.C., the United States, on July 10, 2019. Jerome Powell said Wednesday that crosscurrents such as trade tensions and concerns about global growth have been weighing on the U.S. economic activity and outlook. (Xinhua/Liu Jie/IANS)

Washington, July 30 (IANS) The US Federal Reserve on Wednesday kept its benchmark interest rate unchanged at the record-low level of near zero amid a recent resurgence in Covid-19 cases nationwide.

“Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year,” the Fed said in a statement after concluding a two-day policy meeting, Xinhua reported.

“The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the Fed said, adding the central bank decided to maintain the target range for the federal funds rate at 0-0.25 per cent.

“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Fed said, referring to the Federal Open Market Committee, the Fed’s policy-making body.

The Fed cut interest rates to near zero at two unscheduled meetings in March and began purchasing massive quantities of US treasuries and agency mortgage-backed securities to repair financial markets. It also unveiled new lending programs to provide up to $2.3 trillion to support the economy in response to the coronavirus outbreak.

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