The Federal Reserve announced its plans to hold interest rates near zero until the economy recovers from the pandemic. The Fed also plans to continue its sizeable asset purchase programs while keeping the moderate economic recovery in mind.
With household spending remaining low, a full economic recovery depends “significantly on the course of the virus,” Jerome Powell, the Fed chair said in the first FOMC meeting of 2021.
Federal stimulus payments and extended unemployment benefits have provided essential support to the economy, Powell said. Yet, weakness remains concentrated in sectors that require people to gather in close settings like travel and hospitality, he added.
Unemployment remains elevated to 6.7%, way above 3.5% in Feb. 2020 before the pandemic. Employment fell…