WASHINGTON (AP) – The Federal Reserve says it will keep its key short-term interest rate near zero for the foreseeable future as part of its extraordinary efforts to bolster an economy that is sinking into its worst crisis since the 1930s.
The Fed says it will also continue to buy Treasury and mortgage bonds to help keep rates low and ensure that companies can continue to lend easily to each other amid a near-paralysis of the economy caused by the coronavirus.
“I would say that it may well be the case that the economy will need further support from all of us if the recovery is to be a strong one,” Powell said.
Powell suggested that given the depth of the U.S. economic catastrophe, with perhaps 30 million people having lost jobs in the past six weeks, it will “probably will take some time for us to get back to a more normal level of employment and ultimately maximum employment.”
The chairman and the Fed itself sought to provide reassurance, though, that their aggressive intervention could help mitigate the vast damage to the economy and to millions of workers. In its statement, the Fed said it is “committed to using its full range of tools to support the U.S. economy in this challenging time.”
The central bank did not specify any amounts or timing for its bond purchases.
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