The Federal Reserve on Wednesday promised to keep funnelling cash into financial markets further into the future to fight the recession, even as policymakers’ outlook for next year improved following initial rollout of a coronavirus vaccine.
Repeating a pledge to keep its benchmark overnight interest rate near zero until an economic recovery is complete, the U.S. central bank said it would also now tie its program of monthly government bond purchases to that same goal.
Purchases would continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals,” the Fed’s rate-setting committee said in an unanimous policy statement after the end of a two-day meeting.
The Fed’s statement came as negotiators in Congress were “closing in on” a $900 billion COVID-19 aid bill that will include $600 to $700 stimulus checks and extended unemployment benefits. Barring more aid from Washington, millions of unemployed Americans were slated to lose unemployment benefits the day after Christmas.