The Federal Reserve will continue to keep its target range for the federal funds rate at zero to 0.25% as the COVID-19 pandemic continues, causing “tremendous human and economic hardship across the United States and around the world,” the Federal Open Market Committee said today.
The committee said it will maintain that range of the federal funds rate until inflation has risen to 2% and is on track to moderately exceed 2% percent for some time. The FOMC added that ongoing public health crisis continues to weigh on economic activity, employment, and inflation and poses considerable risks to the economic outlook.
In a press conference after the release of the FOMC statement, Fed Chairman Jerome Powell said that “employment is 9.5 million below its pre-pandemic level. The unemployment rate remains elevated at 6.2% in February. This figure understates the shortfall in employment, particularly as participation in the labor market remains notably below pre-pandemic levels.”