Provided by Dow Jones
By Nick Timiraos WASHINGTON Federal Reserve officials put the final touches Wednesday on a monthslong effort to clarify their plans to support the economy for longer than they have following prior downturns, concluding one of the most active years in the central bank s history. Fed officials slashed their short-term interest rate to near zero in March as the coronavirus pandemic disrupted financial markets and the economy. They also launched an array of emergency lending programs and began large-scale purchases of government debt and mortgage securities. On Wednesday, officials updated their formal guidance around how long those purchases would continue, complementing an earlier pledge in September that set a higher bar to raise interest rates.
As the Federal Reserve concludes a two-day meeting Wednesday, it will be struggling with how to respond to opposing forces in the nation’s COVID-19-fueled economic crisis.
On the one hand, a resurgence of the virus already has slowed the economy, and an even bleaker winter lies ahead. At the same time, wide availability of a vaccine by spring offers the prospect of a substantial improvement.
The Fed already has cut its key short-term interest rate near zero and vowed to keep it there until the economy returns to full employment and inflation runs above its 2% goal “for some time” – a promise that likely would mean no rate hikes until 2024 or beyond, some economists say.
Federal Reserve policymakers face weak short-term outlook thestandard.com.hk - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from thestandard.com.hk Daily Mail and Mail on Sunday newspapers.
Dec 15, 2020
WASHINGTON (AP) The Federal Reserve’s policymakers face an unusual conundrum as they meet this week: A short-term economic outlook that is worsening even while the longer-term picture is brightening thanks to the emergence of coronavirus vaccines.
When its meeting concludes Wednesday, the Fed could announce steps to try to offset the pandemic’s increasing drag on growth. Or it could choose to mostly watch and wait, for now.
The central bank’s policy meeting coincides with a record-shattering resurgence of the coronavirus, which has caused an increase in business restrictions and made more Americans reluctant to shop, travel and dine out. Some analysts say the economy could shrink in early 2021 before recovering as vaccines combat the virus.
WASHINGTON (AP) The Federal Reserve s policymakers face an unusual conundrum as they meet this week: A short-term economic outlook that is worsening even while the longer-term picture is brightening thanks to the emergence of coronavirus vaccines.
When its meeting concludes Wednesday, the Fed could announce steps to try to offset the pandemic s increasing drag on growth. Or it could choose to mostly watch and wait, for now.
The central bank s policy meeting coincides with a record-shattering resurgence of the coronavirus, which has caused an increase in business restrictions and made more Americans reluctant to shop, travel and dine out. Some analysts say the economy could shrink in early 2021 before recovering as vaccines combat the virus.