Federal Reserve officials are expected to leave interest rates near zero for the foreseeable future — likely through at least 2023. This means they will put up with periods of higher inflation in an effort to revive the labor market and economy.
The announcement last week indicates that the Fed chair will be patient as they try to cushion the economy as we move forward.
The Federal Open Market Committee released their September policy statement indicating that it “expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time”
The Fed chair noted that the economy has picked up in some areas, but the recovery in entertainment and tourism remained depressed.
The Fed updated its Summary of Economic Projections, a set of estimates for how the economy and interest rates will develop in coming years. One good note: officials saw unemployment ending 2020 at a lower rate than it previously forecast.
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