WASHINGTON, D.C. — The Federal Reserve plans to keep the target range for the federal funds rate between 0 and 0.25 percent until the end of 2023 due to economic activity and employment being well below that of the beginning of the year. The Washington, D.C.-based committee outlined economic conditions it wishes to see before raising rates, the main condition being inflation to exceed 2 percent “for some time.” Due to the COVID-19 outbreak, the Fed says the labor market will also need to return to “maximum employment” before raising interest rates again. The Fed expects to maintain an accommodative stance of monetary policy, which include increasing its holdings of Treasury securities and agency mortgage-backed securities.
The Fed says its plan, which was made during the Federal Open Market Committee (FOMC) meeting earlier this week, is dependent on the length and severity of the coronavirus pandemic.