The U.S. Federal Reserve (Fed) expectedly kept the prime rate at 0-0.25% per annum. The Fed does not expect the rate to change before the end of 2021. This is the sixth time the decision to keep the rate has been made.
“The (Open Market Committee.- “Kommersant”) has decided to keep the federal funds rate target range at 0-0.25 percent and expects it will be appropriate to maintain that target range until labor market conditions reach levels consistent with estimates for maximum employment and inflation growth to 2 percent,” the regulator said in a statement.
All committee members expect the rate to remain at that level in 2021. Most on the committee believe the rate will also remain in 2022 and 2023. One thinks it should be raised in 2022, while five favored an increase in 2023.
The Fed has improved its forecast of a decline in U.S. GDP in 2020 from 3.7% to 2.4%. The growth forecast for 2021 is improved from 4% to 4.2% and for 2022 from 3% to 3.2%.