The Federal Reserve on Wednesday kept interest rates effectively at 0 percent and vowed to increase holdings in Treasury securities and mortgage-backed securities to support the economy during the coronavirus pandemic.
In a statement following its meeting, the Fed said it “is committed to using its full range of tools to support the U.S. economy in this challenging time.” That includes keeping interest rates in the 0 to 0.25 percent range.
“To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions,” the Fed said in a statement.
The Federal Reserve Bank of New York said in a statement it will increase holdings of Treasury securities at its current pace of $80 billion per month and mortgage-backed securities at about $40 billion a month.
“The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy,” the Fed said.