March 17, 2021

The Federal Reserve is committed to using its entire set of tools to assist the United States economy through this difficult period while supporting its maximum employment and price stability targets. Despite the fact that the COVID-19 pandemic is still wreaking havoc across the world, economic growth and jobs have moderated in recent months. Following a moderation in the rate of recovery, indicators of economic development and employment have recently increased, though the sectors most impacted by the pandemic remain poor. Additionally, overall financial conditions remain accommodative partly attributable to the support of policy measures to boost the economy and the flow of credit to U.S. households and businesses.

The Federal Reserve cites, “the path of the economy will depend significantly on the course of the virus, including progress on vaccinations.” The Committee’s long-term aim is to maintain employment and inflation at 2%, and it aims to keep monetary policy accommodative until these goals are reached. According to the Federal Reserve, “The committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labour market conditions have reached levels consistent with the Committee’s assessments.”

Furthermore, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion a month and agency mortgage-backed securities by at least $40 billion per month in order to promote smooth market functioning and accommodative financial conditions, thus facilitating the flow of credit to households and businesses. The Committee will continue to monitor the implications of incoming information for the economic outlook and is prepared to adjust the stance of monetary policy if necessary.