The Federal Reserve just announced zero interest rates through 2022. The Central Bank voted to keep benchmark short-term rates near zero. The Fed also said it would keep buying bonds, targeting $80 billion a month in Treasury bills and $40 billion in mortgage-backed securities in an effort to maintain market stability.
Here’s what we’ll cover in this video:
1. Federal Funds Rate Over the Past 20 Years
2. Breaking News – Announcement from the Fed
3. What This Means To You
A market consists of all the buyers and sellers making transactions for the same thing Just like you have a buyer and seller, you have a lender and a borrower. Consumers, businesses, banks and governments engage in transactions, exchange money and credit for good, services and financial assets. When the Federal Funds Rate (FFR) is low, it is cheaper to borrow money.
ANNOUNCEMENTS FROM THE FEDERAL RESERVE CHAIRMAN
“We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates,” Fed Chairman Jerome Powell said. “What we’re thinking about is providing support for the economy. We think this is going to take some time.”
The central bank repeated its commitment from the April meeting that it “expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
Powell said the economic projections were made with the “general expectation of an economic recovery beginning in the second half of this year and lasting over the next couple of years, supported by interest rates that remain at their current level near zero.”