Fed "Maintaining Zero Interest Rate Until 2023" (Summary)

Interest Rate Hike Timing Indicated
"Economic Recovery Falls Short of Early Year"
Asset Purchase Guidelines Announced but No Expansion in Purchases

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. central bank, the Federal Reserve (Fed), has announced its stance to maintain the benchmark interest rate at 'zero' (0) level until 2023.

On the 16th (local time), the Fed stated in the Federal Open Market Committee (FOMC) meeting statement that it will keep the benchmark interest rate unchanged at the current 0.00~0.25%.

The Fed explained in the statement, "Economic activity and employment continue to recover, but remain well below the levels at the beginning of the year," and added, "It is expected to be appropriate to maintain the target range until labor market conditions reach a level consistent with the FOMC's assessment of maximum employment and inflation."

In this regard, The Wall Street Journal reported that in the dot plot released by the Fed that day, a majority of FOMC members forecast that the zero interest rate will be maintained at least until 2023.

In the statement, the Fed indicated that the timing for changing the $120 billion per month bond purchase program would be when employment and inflation targets are met. However, there was no change in the scale of bond purchases.