The minutes of the Federal Open Market Committee meeting held on April 28-29 were announced by the US Federal Reserve.
The minutes of the meeting of the Federal Open Market Committee (FOMC) of the Federal Reserve Bank (Fed), held on April 28-29, has been published.
In the minutes of the last meeting, where the policy rate was kept constant between 0-0.25 percent, it was reminded that the new type of coronavirus (Kovid-19) epidemic and the measures taken against it caused a sharp decrease in economic activity and an increase in job loss.
“The participants concluded that the effects of the coronavirus epidemic and the ongoing public health crisis will continue to put a heavy pressure on economic activity, employment and inflation in the short term and pose significant risks to the economic outlook in the medium term,” the minutes said. expressions were used.
“Larger financial support may be required”
It was reported that the economic activity was likely to decline at an unprecedented rate in the second quarter, and the epidemic and the measures taken against it had a negative impact on household spending and consumer confidence.
It was stated in the minutes that reaching the long-term inflation target of 2 percent by the Committee will be delayed further, but the monetary policy stance will help achieve this target in the long term.
In the minutes emphasizing that the financial programs implemented against the effects of the Kovid-19 outbreak are important to limit the severity of the economic recession, “Participants are aware that greater financial support may be required if the economic decline continues.” evaluation was included.
“It has created an extraordinary level of uncertainty and significant risks in the medium term”
In the minutes, the participants commented that the economic impacts of the epidemic create an extraordinary level of uncertainty and significant risks in the medium term, as well as its pressure on economic activity in the short term. expression was used.
In the minutes, which also pointed out the possible risks to financial stability, it was underlined that the banking sector should be monitored carefully, because it was worried that banks could be under more pressure if negative scenarios regarding the course of the epidemic occur.
“Given the monetary policy, the participants stated that the Fed is determined to use all its tools to support the US economy in this difficult period, thereby supporting its maximum employment and price stability targets,” the minutes said. evaluation was included.
The signal that the interest rate will be kept at the current level
It was stated in the minutes that it would be appropriate to keep the policy rate in the range of 0-0.25 percent, and it was noted that keeping the said interest range at the lower limit will continue to support the economy and the Committee’s price stability targets with maximum employment.
“Also, the participants decided that it would be appropriate to keep the target range of federal funding rates at the current level until policymakers are sure that the economy has survived the latest events and the Committee is on its way to achieving the goal of maximum employment and price stability.” expression was used.