June 17, 2021
1 min read

US Fed keeps interest rates near zero

The Fed noted that the sectors most adversely affected by the pandemic “remain weak but have shown improvement”….reports Asian Lite News

The Federal Reserve kept its benchmark interest rates unchanged at the record-low level of near zero, as the economic recovery continues amid growing concerns over inflation surge.

“Progress on vaccinations has reduced the spread of Covid-19 in the US. Amid this progress and strong policy support, indicators of economic activity and employment have strengthened,” the Fed said in a statement issued on Wednesday after concluding its two-day policy meeting.

The Fed noted that the sectors most adversely affected by the pandemic “remain weak but have shown improvement”.

With inflation having run persistently below the 2 per cent longer-run goal, the Federal Open Market Committee will aim to achieve inflation moderately above 2 per cent for some time so that inflation averages 2 per cent over time and longer-term inflation expectations remain well anchored at 2 per cent, the Fed reiterated, acknowledging that inflation has risen, “largely reflecting transitory factors.”

The Fed’s statement came days after the Labour Department reported that consumer prices rose 0.6 per cent in May, with a 12-month increase of 5.0 per cent, marking the largest 12-month increase since the period ending August 2008.

Excluding the volatile food and energy categories, the so-called core consumer price index (CPI), the Fed’s preferred inflation measure, rose 0.7 per cent in May, following a 0.9 per cent increase in April.

The index for all items excluding food and energy rose 3.8 per cent over the last 12 months, the largest increase since the period ending June 1992, according to the Labour Department.

The central bank also pledged to continue its asset purchase program at least at the current pace of $120 billion per month until the economic recovery makes “substantial further progress”.

Despite that, economists and analysts had predicted that Fed officials could begin debate on tapering the Fed’s monthly asset purchases as soon as this week’s policy meeting, but the central bank is unlikely to publicly reveal that plan until August or September.

ALSO READ: Sarala Nagala nominated as US federal judge

Previous Story

US pledges funding to help Egypt move to solar power

Next Story

UAE to second rover to Moon by 2025

Latest from Economy

ADX, banks launch region’s first digital bond

Abu Dhabi Securities Exchange (ADX) has launched the pricing phase for the region’s first distributed ledger technology (DLT)-based bond, setting a new benchmark in financial innovation and blockchain integration. The bond, issued

The UK’s Net Zero Journey

Achieving net zero is not just a technological but also a political and cultural undertaking, writes Hasil Farooque In 2019, the United Kingdom officially committed itself to eradicate all greenhouse gas emissions

India Outpaces Peers in Morgan Stanley Outlook

Global investment firm reaffirms India’s status as top-performing economy in latest growth outlook…reports Asian Lite News India is set to retain its position as the fastest-growing economy among nations tracked by Morgan

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite News Microsoft is set to cut around 9,000 jobs —

Pakistan misses export target

Pakistan misses export target for 2024-25 despite modest growth, with rising imports widening the trade deficit and prompting urgent cost-cutting measures across key sectors….reports Asian Lite News Pakistan has fallen short of
Go toTop

Don't Miss

Shell’s exit sparks domino effect fears in Pakistan

The oil major’s announcement might set the ball rolling for

‘India To Be $4Tn Economy By FY25, Not $5 Tn’

In 2019, India ‘s Prime Minister Narendra Modi had set