The Fed is Planning Another Ultra-Long Period of Ultra-Low Rates

by Ryan McMaken
Mises.org

Jerome Powell fielded questions from reporters Wednesday, and he made it clear the Fed is a long, long way from abandoning its current dovish policy stance. The Fed plans to keep interest rates near zero, while monetizing US debt, financing zombie companies, and pouring new dollars into the market through balance sheet purchases. But even that may not be enough, and the Fed is now hinting that even more fiscal support may be necessary.

Let’s look at some of the details.

Interest Rates

When asked about interest rates, Powell replied:

With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current zero to 0.25% target range for the federal funds rates until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.

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