Federal Reserve officials left their benchmark interest rate unchanged near zero and said that the “path of the economy” would be influenced by “the course of the virus.”
“The path of the economy will depend significantly on the course of the virus,” Federal Open Market Committee said in a statement Wednesday released at the end of its two-day policy meeting.
After sharp declines earlier this year, economic activity and employment “have picked up somewhat in recent months but remain well below their levels at the beginning of the year,” the Fed said.
The Fed also said a decline in “demand and significantly lower oil prices are holding down consumer price inflation.”
“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the Fed said in its statement.
The Fed said that over the coming months the Federal Reserve will increase its bond holdings “at least at the current pace.” The Fed’s recently has been purchasing Treasuries and mortgage-backed securities at a rate of more than $1 trillion a year.
The Fed appeared to go out of its way to acknowledge the human costs of the pandemic in its policy statement. “The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world,” the Fed said.