Fed signals it will likely hold rates near zero for months

The Federal Reserve signalled Wednesday that it will keep its key short-term interest rate near zero for the foreseeable future as part of its extraordinary efforts to bolster an economy that is sinking into its worst crisis since the 1930s.

As part of its emergency steps, the Fed said it will also keep buying Treasury and mortgage bonds to help keep rates low and ensure that companies can lend easily to each other amid a near-paralysis of the economy caused by the coronavirus.

It did not specify any amounts or timing for its bond purchases.

At a news conference, Chairman Jerome Powell cautioned about any prospects for a swift or a robust economic recovery, saying, "I would say that it may well be the case that the economy will need further support from all of us if the recovery is to be a strong one."
Powell suggested that given the depth of the US economic catastrophe, with perhaps 30 million people having lost jobs in the past six weeks, it will "probably will take some time for us to get back to a more normal level of employment and ultimately maximum employment."