Wednesday , October 27 2021

Federal Reserve: The United States Federal Reserve indicates a change of direction



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The US Federal Reserve (Fed) has announced that it will not change the key interest rate. But he wants to push a new course soon.

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The U.S. Federal Reserve has indicated it intends to cut purchases soon.

The U.S. Federal Reserve has indicated it intends to cut purchases soon.

AFP

Fed Chef Jerome Powell.
REUTERS

The United States Federal Reserve (Fed) keeps its monetary policy very weak. The key interest rate remains in the low range of 0.0 to 0.25 percent, the central bank announced on Wednesday. The Fed will also continue to buy stocks worth $ 120 billion a month. At the same time, the central bank indicated that purchases could soon be reduced.

The purchase of securities decided last year due to the crisis of the crown aims to improve the liquidity of financial markets and facilitate the provision of loans for households and businesses.

Reducing the repurchase rate “soon” is justified

By the end of July, with a view to the bond program, the Fed had already announced that the U.S. economy had advanced on its full employment and inflation targets. This has now been confirmed. And the Fed announced that a slowdown in the repurchase rate could be justified “soon” if the trend continues as expected.

Meanwhile, the current level of interest rates is adequate until full employment in the labor market is reached and the inflation target of around two percent is reached, the Fed stressed after a meeting of the money market committee.

The European Central Bank (ECB) has recently announced a slight reduction in its bond-buying program.

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(DPA / wall)



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