As expected, the U.S. Federal Reserve said at the conclusion of its latest policy meeting that it is not yet ready to consider scaling back its pandemic support or to raise interest rates.
The Federal Open Market Committee said in a written statement that it is holding its key interest rate near zero and maintaining a $120-billion U.S. monthly pace of asset purchases.
Marking a clear improvement since the global pandemic took hold more than a year ago, the Fed said that "risks to the economic outlook remain," softening previous language that referred to the virus posing "considerable risks."
The statement also noted that sectors hit hardest by the pandemic have "shown improvement" recently. And the central bank said that "inflation has risen, largely reflecting transitory factors."
At a post-meeting press conference, Fed Chairman Jerome Powell said that the economic recovery has been faster than expected but "remains uneven and far from complete” and that the economy “is a long way from our goals.”
The Fed repeated that it would not change the pace of bond buying until “substantial further progress” is made on its employment and inflation goals. The target range of the benchmark federal funds rate was kept at zero to 0.25%, where it has been since March 2020.
Analysts surveyed by Bloomberg Data expect the U.S. economy this year to expand at the fastest pace in more than three decades, with the Fed expected to announce in late 2021 that it will start slowing the pace of its asset purchases.
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