The main US interest rate is between 0 and 0.25 percent. The Federal Reserve is aiming for an average inflation rate of 2 percent over time and “maximum employment” before interest rates rise again.
Until then, the central bank will support the economy to achieve those goals. The Fed will continue to buy treasury bonds and bundled mortgage debt at the same level as is already happening in the coming months.
The central bank is more positive about the US economy than it was a few months ago. The Fed is expecting an economic downturn of between 3 and 4 percent this year, while previously it was expected to contract a minimum of 5.5 percent and a maximum of 7.6 percent.
For next year, the Fed expects the recovery to be between 3.6 and 4.7 percent, which is slightly lower than previously forecast. In 2022 the economy would grow by at least 2.5 percent and a year later by at least 2.4 percent.
Unemployment will also be lower, the Fed now thinks. In the fourth quarter, it will now be 7.6 percent, while the central bank previously thought of 9.3 percent. Next year, unemployment should fall to just above 6 percent and reach a maximum of 5 percent by 2022.