News

This week the U.S. Federal Reserve met for two days at the Federal Open Market Committee meeting and detailed that it would keep short-term borrowing rates at near zero. Meanwhile, the Fed also stated that it would continue buying bonds until the U.S. economy returns to full employment.

America’s central bank met this week for the last Federal Open Market Committee (FOMC) meeting of 2020. The Fed has a touch more optimism for the end of this year and into 2021 according to the summary of economic projections. However, the central bank will make no changes to the benchmark interest rate and it will remain near zero for quite some time.

“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed said this week. “The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the central bank further added.

QE Infinity: US Fed to Keep Rates at Zero, Billion-Dollar Bond Purchases Until Economy Recovers
At the FOMC meeting Fed Chair, Jerome Powell, said he was positive about Covid-19 vaccines, but also stressed it may take some time for Americans to “reengage” in economic activities.

The FOMC progress report also noted that the Fed plans to continue purchasing at least $120 billion in bonds per month “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The committee did not disclose how long it will continue the easing program’s bond purchases.

“These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the Federal Open Market Committee added.

QE Infinity: US Fed to Keep Rates at Zero, Billion-Dollar Bond Purchases Until Economy Recovers

However, despite the optimistic outlook, the U.S. dollar has been looking dreadful lately as the U.S. Dollar Index has plunged below 90. During the last few months, many economists and analysts have predicted bad omens for the American currency.

“The U.S. Dollar Index has broken below 90 with very little fanfare,” the gold bug Peter Schiff wrote on Thursday. “I expect a bit more noise when it breaks below 80. However, the real fireworks will start when the index cracks 70, which would take it into uncharted territory. That failure could happen as soon as next year,” Schiff added.

Meanwhile, the safe-haven asset gold has been climbing in value again as the precious metal trades for $1,887 on Thursday afternoon (EST). Since the Fed’s FOMC meeting this week, crypto assets have been on a tear, as the crypto economy is now getting much closer to a trillion dollars at $650 billion.

After the Fed convened and gave the FOMC’s economic outlook, bitcoin (BTC) touched a lifetime price high at $23,777 per unit.

What do you think about the fact that the Fed is keeping interest rates at zero and will continue to purchase massive sums of bonds? Let us know what you think about this subject in the comments section below.

Tags in this story
0% interest rates, American currency, Bitcoin, Bitcoin (BTC), Bond Purchases, Central Bank, Covid-19 Virus, economic projections, Federal Open Market Committee, Federal Reserve, FOMC, gold, interest rates, jerome powell, Peter Schiff, US Central Bank, USD, USD Index, Vaccine

Image Credits: Shutterstock, Pixabay, Wiki Commons, Trading View,

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read disclaimer

Products You May Like

Articles You May Like

New Peer to Peer Exchange Provides Africans with an Alternative to Paxful
Bitcoin Price Spike Targets the $40K Handle, Crypto Economy Recaptures $1 Trillion Market Cap
Bitcoin chases new high as analyst says ‘smart money never stopped’ buying
WAX Launches New DeFi Model to Share Revenue Earned From NFT Sales
Bahamas-Based Deltec Bank Holds a ‘Large’ Bitcoin Position
Pre-Register Now on Aladdin Exchange to Receive 100 TNC Coins

Leave a Reply

Your email address will not be published. Required fields are marked *