Federal Reserve Keeps Rates Unchanged, Adds Qualitative Guidance on Pace of Money-Printing

The Federal Reserve said Thursday said it would hold U.S. interest rates at their current level, close to zero, and added qualitative criteria to govern how long it will keep up its $120-a-month bond-buying program.

Dec 16, 2020 at 7:14 p.m. UTC
Updated Sep 14, 2021 at 10:44 a.m. UTC

The Federal Reserve said Thursday said it would hold U.S. interest rates at their current level, close to zero, and added qualitative criteria to govern how long it will keep up its $120-a-month bond-buying program.

"Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year," according to a statement released at the conclusion of this week's two-day, closed-door meeting of the central bank's monetary-policy committee, known as the Federal Open Market Committee, or FOMC.

  • Key target rate for federal funds to stay in a range of 0% to 0.25%
  • Fed plans to keep buying $80 billion of U.S. Treasury bonds and $40 billion of agency mortgage-backed securities every month "until substantial further progress has been made toward the committee's maximum employment and price stability goals."
  • That's a change in wording from the statement issued after the Fed's previous meeting in November, where it said the bond purchases would continue "to sustain smooth market functioning and help foster accommodative financial conditions."
  • Summary of economic projections released along with the statement shows FOMC members have turned slightly more optimistic about the economy since September.
  • On average, they expect GDP to contract 2.4% in 2020, versus a September projection for 3.7% decline. The average expectation for growth in 2021 is 4.2%, versus a 4% projection in September.
  • Prices for personal consumption expenditures, the Fed's preferred inflation measure, could rise 1.8% next year, compared with a September projection of 1.7%.

Traders in digital-asset markets have tracked the Fed's decisions this year because many analysts say the U.S. central bank's trillions of dollars of money printing could bolster use of bitcoin among institutional investors as an an inflation hedge.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Crypto News Roundup for May 25, 2022

With bitcoin seemingly unable to break above the $30,000 threshold, plus a look at the suspects in the cast of the UST collapse, CoinDesk’s "Markets Daily" is back with the latest news roundup.

With bitcoin seemingly unable to break above the $30,000 threshold, plus a look at the suspects in the cast of the UST collapse, CoinDesk’s "Markets Daily" is back with the latest news roundup.

CoinDesk - Unknown
2
CoinDesk - Unknown
ApeCoin

CoinDesk - Unknown
3
CoinDesk - Unknown
Proof-of-Work vs. Proof-of-Stake: What Is the Difference?

Proof-of-work (PoW) and proof-of-stake (PoS) are two different methods to validate cryptocurrency transactions.

Proof-of-work (PoW) and proof-of-stake (PoS) are two different methods to validate cryptocurrency transactions.

CoinDesk - Unknown
4
CoinDesk - Unknown
Golf Brand Callaway Joins LinksDAO as Equity Investor, ‘Strategic Partner’

The DAO that wants to buy a golf course is adding a big name to its cap table.

The DAO that wants to buy a golf course is adding a big name to its cap table.

CoinDesk - Unknown