Interest Rate Likely to Remain Near Zero til 2022, Fed Chairman Powell Announced Today
Federal Reserve Chairman Jerome Powell made the announcement today, and added that the Federal Reserve will do everything it can “to support the economy”; which right now, means keeping the interest rate near zero until “it is confident that the economy has weathered recent events”.
The Federal Reserve also revealed they expect the nation’s GDP to decrease 6.5% this year, and then recover with a 5% increase in 2021. Latest estimate for GDP in the second quarter is -48.5%; GDP decreased 4.8% in the year’s first quarter.
To help reach that road of 2021 recovery, Federal Reserve Chairman Powell referenced recent actions taken surrounding the Paycheck Protection Program. Such actions include extending the deferment of loan payment period to two years. This, the Federal Reserve claims, will allow small businesses whom receive the loans greater flexibility in repaying.
Chairman Powell says he is “confident” the actions the Fed is taking will “help foster a broad-based economic recovery”.