Fed "Must Confirm Substantial Progress Before Raising Interest Rates" (Comprehensive)

Decision to Maintain Zero Interest Rate and Asset Purchase Pace
Emphasizes Continuation of Easing Policy Despite Inflation Rise and Economic Recovery Acknowledgment

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. Federal Reserve (Fed) has decided to maintain the current zero (0) level benchmark interest rate and continue the pace of asset purchases. The Fed emphasized that it will continue its accommodative monetary policy while acknowledging economic growth, employment recovery, and rising inflation.

The Fed announced this after a two-day Federal Open Market Committee (FOMC) meeting on the 28th (local time). The decision to keep the interest rate unchanged was unanimous.

The Fed evaluated, "Economic activity and employment indicators have strengthened due to expanded COVID-19 vaccinations and strong economic support measures. The situation in the most vulnerable areas to COVID-19 has also partially improved."

The Fed judged that "inflation has risen but mainly reflects temporary factors," and reiterated, "To normalize interest rates and reduce bond purchases, substantial progress toward the maximum employment goal and the 2% average inflation target must be confirmed."

Since the COVID-19 outbreak in March last year, the Fed has lowered the benchmark interest rate to 0.00?0.25% and is supporting the U.S. economic recovery through asset purchases amounting to $120 billion per month.

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