The two-day meeting held by the Federal Reserve painted a clear picture of the future of the American economy.
The Federal Open Market Committee (FOMC) has decided to exclude the idea of a negative interest rate and keep it between 0% and 0.25%. Fed's interest rate forecast for this year and the next two were set at 0.1% after the projections ranged from 1.6% to 2.1%.
For this year, the GDP is to contract by 6.5%, revoking the 2% growth estimated for the year. The Fed raised the economic growth estimates for next year to 5% from 1.9%. For 2022 it expects an increase of 3.5% from 1.8% original. In terms of inflation, it will drop to 0.8%.
The unemployment rate it's expected to reach 9.3% from the initial 3.5% in 2020. By 2022, it will fall to 5.5%.
The combined Fed financial measures to cushion the pandemic's impact on the market exceeded $7 trillion. The central bank will continue its bond-buying process at the same rate as now to assure a cash flow to households and businesses.
The measures will be in force until the economy is on the right track toward achieving maximum employment and price stability.
The American 10-year Treasuries ended the day by shedding 0.72%.
Sources: forexfactory.com, investing.com, economictimes.indiatimes.com