U.S. Fed keeps interest rates near zero amid inflation concerns

US Materials 17 June 2021 05:17 (UTC +04:00)

The U.S. Federal Reserve on Wednesday kept its benchmark interest rates unchanged at the record-low level of near zero, as the economic recovery continues amid growing concerns over inflation surge, Trend reports citing Xinhua.

"Progress on vaccinations has reduced the spread of COVID-19 in the United States. Amid this progress and strong policy support, indicators of economic activity and employment have strengthened," the Fed said in a statement after concluding its two-day policy meeting.

The Fed noted that the sectors most adversely affected by the pandemic "remain weak but have shown improvement."

With inflation having run persistently below the 2-percent longer-run goal, the Federal Open Market Committee (FOMC) will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent, the Fed reiterated.

At a virtual news conference Wednesday afternoon, Fed Chairman Jerome Powell said inflation has come in "above expectations" over the last few months, but over time, it seems likely that these specific things that are driving up inflation "will be temporary."

"We will see increases in supply over coming months, as the factors that we believe have been suppressing supply abate, wane, move down," Powell said, noting that the central bank is going to be looking at the monthly pricing data.