By the end of its policy-making encounter, the Federal Reserve acknowledged that the Coronavirus pandemic will keep affecting the American economy and stated that it will continue with its current policies to protect the economy.
After a two-day encounter to discuss policies, the Federal Reserve showed its concern regarding the Coronavirus pandemic and its impact on the economy and hiring within the next months.
Although the economy has rebounded after the March and April lockdown that forced many states to close down nonessential businesses, the spike in cases "will weigh heavily on economic activity, employment and inflation."
The FED stated that it won't launch new policies. Instead, it plans to keep its benchmark short-term interest rate set near zero. Moreover, the central bank added that it will continue to buy about $120 billion in Treasury and mortgage bonds every month. This way, it can inject cash into the financial markets.
Back in March, the Federal Reserve slashed its short-term rate, announced it bought more than $2 trillion in Treasury and mortgage bonds and presented a series of lending programs in order to keep a smooth flow in credit.
The pandemic's threat to the economy has worsened since the FEDs previous meeting in June, as the number of jobless Americans increased and unemployment benefit applications boosted.