As the coronavirus pandemic continues to cause tremendous human and economic hardship across the country the Federal Reserve will aim to achieve inflation “moderately above 2% for some time” the Federal Open Market Committee said today.
The target range for the federal funds rate will stay at 0 to 0.25%. The committee said it expects to maintain that range until the labor market reaches maximum employment (based on the committee’s assessment) and inflation has risen to 2% and stays on track to moderately exceed 2%.
“The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the committee said in a statement. Economic activity and employment have picked up in recent months, the Fed said, but remains “well below their levels at the beginning of the year.”
In a press conference after the release of the FOMC statement, Fed Chairman Jerome Powell said while the unemployment rate has declined over the past few months “we will not lose sight of the millions of Americans out of work,” and went on to say the strong policy guidance being provided will promote the Fed’s goals “through the many possible paths the recovery may take.”