Fed, "Serious Economic Impact from COVID-19 and Oil Prices... Maintaining Zero Interest Rate"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The United States Federal Reserve (Fed) announced that it will maintain zero interest rates until employment and inflation return to normal, citing severe economic and health damage caused by the novel coronavirus infection (COVID-19).

Following the regular meeting of the Federal Open Market Committee (FOMC) on the day, the Fed stated in a unanimous decision that it would keep the benchmark interest rate unchanged at the current 0.00?0.25%.

The Fed said, "The public health crisis is putting strong pressure on economic activity, employment, and short-term inflation," adding, "There are significant risks to the medium-term economic outlook." It also diagnosed that the sharp drop in oil prices is adversely affecting inflation.

The Fed also expressed its position to maintain the current benchmark rate until it is confident that it is on track to achieve the goals of "maximum employment" and "price stability."

It reaffirmed its policy to take all necessary measures to support households and businesses and back economic recovery to overcome the crisis. The Fed emphasized that it will continue asset purchases and open market operations to stabilize the short-term financial market amid the COVID-19 situation.

The Fed lowered the benchmark interest rate by 1 percentage point from the previous 1.00?1.25% to 0.00?0.25% on the 15th of last month, returning to zero interest rates for the first time since the 2008 financial crisis.

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