BUSINESS US Fed keeps interest rates near zero amid election uncertainty

BUSINESS

US Fed keeps interest rates near zero amid election uncertainty

Xinhua

17:17, November 06, 2020

The US Federal Reserve on Thursday kept its benchmark interest rate unchanged at the record-low level of near zero amid uncertainty about the final result of Tuesday's presidential election.

The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018.(File photo: CFP)

"Economic activity and employment have continued to recover 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, adding the path of the U.S. economy will depend significantly on the course of the coronavirus.

"The ongoing public health crisis will continue to weigh 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.

The central bank decided to maintain the target range for the federal funds rate at 0-0.25 percent, pledging to use its full range of tools to support the U.S. economy "in this challenging time."

The Fed expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with its assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time, according to the statement.

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

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