Fed keeps rate near zero but sees brighter economy in 2021
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.