Fed keeps rate near zero but sees brighter economy in 2021

FILE PHOTO: The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid

WASHINGTON (AP) — The Federal Reserve will keep buying government bonds until the economy makes “substantial” progress, a step intended to reassure financial markets and keep long-term borrowing rates low.

The Fed also said after its latest policy meeting that it will keep its short-term benchmark interest rate pegged near zero.

The Fed has kept its key rate there since March, when it took a range of extraordinary steps to fight the pandemic recession. In a series of economic projections, Fed officials painted a brighter picture of the economy next year, compared with its last projections in September.

The improvement likely reflects the expected impact of the new coronavirus vaccines.

Categories: National News