QE Infinity: US Fed to Keep Rates at Zero, Billion-Dollar Bond Purchases Until Economy Recovers

Spread the love

This week the U.S. Federal Reserve met for two days at the Federal Open Market Committee meeting and detailed that it would keep short-term borrowing rates at near zero. Meanwhile, the Fed also stated that it would continue buying bonds until the U.S. economy returns to full employment.

America’s central bank met this week for the last Federal Open Market Committee (FOMC) meeting of 2020. The Fed has a touch more optimism for the end of this year and into 2021 according to the summary of economic projections. However, the central bank will make no changes to the benchmark interest rate and it will remain near zero for quite some time.

“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed said this week. “The path of the economy will depend significantly on the course of the virus. 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 central bank further added.

QE Infinity: US Fed to Keep Rates at Zero, Billion-Dollar Bond Purchases Until Economy Recovers
At the FOMC meeting Fed Chair, Jerome Powell, said he was positive about Covid-19 vaccines, but also stressed it may take some time for Americans to “reengage” in economic activities.

The FOMC progress report also noted that the Fed plans to continue purchasing at least $120 billion in bonds per month “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The committee did not disclose how long it will continue the easing program’s bond purchases.

RECOMMENDED READ:  Litecoin price prediction: LTC to fall towards $77, analyst

“These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the Federal Open Market Committee added.

QE Infinity: US Fed to Keep Rates at Zero, Billion-Dollar Bond Purchases Until Economy Recovers

However, despite the optimistic outlook, the U.S. dollar has been looking dreadful lately as the U.S. Dollar Index has plunged below 90. During the last few months, many economists and analysts have predicted bad omens for the American currency.

“The U.S. Dollar Index has broken below 90 with very little fanfare,” the gold bug Peter Schiff wrote on Thursday. “I expect a bit more noise when it breaks below 80. However, the real fireworks will start when the index cracks 70, which would take it into uncharted territory. That failure could happen as soon as next year,” Schiff added.

Meanwhile, the safe-haven asset gold has been climbing in value again as the precious metal trades for $1,887 on Thursday afternoon (EST). Since the Fed’s FOMC meeting this week, crypto assets have been on a tear, as the crypto economy is now getting much closer to a trillion dollars at $650 billion.

After the Fed convened and gave the FOMC’s economic outlook, bitcoin (BTC) touched a lifetime price high at $23,777 per unit.

 270 Interactions,  2 today

READ ALSO:
House Consolidates Central Bank Digital Currency, E-Payment Bills

Please share and grow the BitPinas community. December 16, 2020 — The House of Representatives Committee on Banks and Financial Read more

Bank of America Investor Survey Highlights the Most Crowded Trades: ‘Long Tech, Short USD, Long Bitcoin’

The highly anticipated Bank of America fund manager survey has been published, and this December fund managers who participated in Read more

Financial Analysts Expect US Dollar to Soften Further, 2021 Could Be the Greenback’s ‘Worst Year Ever’

Well before the coronavirus pandemic, global economists expected a grim-looking American economy and during the last ten months of the Read more

“2021 May Be the Worst Year Ever for the U.S. Dollar,” Says Peter Schiff

Renowned financial experts and economists are predicting a weak position for the US dollar, and the gap created by it Read more

Ethereum Price Movement Analysis for 4th April, 2021

Ethereum, the second-largest cryptocurrency, has entered a volatile zone, which could drive the digital asset's price even higher. In the Read more

Chainlink, DigiByte, Enjin Coin Price Movement Analysis for 4th April, 2021

Bitcoin faced some selling pressure just above the $59k mark, leading it to slip to $56,600. The majority of the Read more

Bitcoin fell by more than 4%, causing many other cryptocurrencies to plummet drastically.

The world's most expensive cryptocurrency fell 4.1 percent, bringing several other coins down with it, sending the economy into the Read more

Litecoin Price Movement Analysis for 3rd April, 2021

For the last few days, the cryptocurrency industry has been playing chase with the bulls and bears. The economy has Read more

Polkadot Price Movement Analysis for 3rd April, 2021

The ETH/BTC pair has stopped trending downward and has actually made gains in recent days, flashing a buy signal across Read more

Binance Coin, Elrond, Hedera Hashgraph Price Movement Analysis for 3rd April, 2021

Bitcoin, the world's biggest cryptocurrency, was traded just under $60k at the time of publication, as it had for the Read more

Leave a Reply

Contact Us