The Federal Reserve today issued a November Federal Open Market Committee statement that it will maintain the benchmark interest rate unchanged at 0%-0.25%, the excess reserve ratio (IOER) at 0.1%, and the discount rate at 0.25%.
The announcement also stated that the United States will maintain a loose monetary policy stance and strive to keep the inflation rate moderately higher than 2% for a period of time so that the average long-term inflation rate can reach 2%, while long-term inflation expectations remain at 2%.
The Federal Reserve said it will continue to increase its holdings of US Treasury bonds and mortgage bonds at the current rate to maintain the smooth operation of the market.
This is in line with economists’ expectations that the Fed will not take new monetary policy actions.
The Federal Reserve stated that “weak demand and the earlier drop in oil prices have been suppressing consumer price inflation.”
“The new crown pneumonia epidemic is causing huge economic difficulties in the United States and around the world.”
“The overall financial situation remains accommodative, partly reflecting the policy measures to support the economy and the flow of credit to American households and businesses.”
“Economic trends will largely depend on the spread of the virus. The ongoing public health crisis will continue to affect economic activity, employment and inflation in the short term, and pose considerable risks to the medium-term economic outlook.”
The Fed’s balance sheet this year has expanded by about US$3 trillion to reach US$7.1 trillion, which has triggered concerns about future inflation and boosted investor demand for Bitcoin. Bitcoin is seen as a hedge against rising consumer prices and a weaker U.S. dollar.
