US Fed announced the following points during its press conference on Wednesday:
1. The Federal Reserve will maintain interest rates at a range of 0% to 0.25%.
2. These rates will remain close to zero until 2023.
3. The Fed forecasts US GDP to contract much lower in 2020 than earlier predictions, but in 2021 and 2022, it will grow slower than expected.
4. Rates will remain at such low levels until the US labor market achieves maximum employment, and inflation rises above 2%.
5. The Fed will use all possible measures to support the US economy.
6. Its current target is maximum employment and 2% inflation over the long term.
7. The Fed will strive to keep inflation moderately above 2% for some time in order for it to average at 2%.
8. It will continue to buy securities to create favorable financial conditions.
This stance of the Federal Reserve is clearly dovish, indicating that inflation is key for bright outlook for the economy ..
It also updated its economic forecast for 2020, saying that the US will record a GDP of -3.7%.
"That's not as bad as predicted since June," noted Joe Manimbo, senior market analyst at Western Union. "Higher rates will make the dollar more attractive. The Fed has basically met the market expectations this time, " he added.
The material has been provided by InstaForex Company - www.instaforex.com