Fed Seeks More Tools to Buoy US Economy, Affirming Policy Rate to Stay above Zero!

Federal Reserve (Fed) Chairman Jerome Powell said that the Fed might need additional tools to curb the effect of the coronavirus outbreak and pull the country’s economy up from its low point as 33.5 million Americans filed for jobless benefits in the last seven weeks.

 

In his statement, Powell said the current situation caused by the coronavirus outbreak is unlike previous recessions the U.S. has endured, while pointing that the Congress should take responsibility more than the Fed.

However, Powell signaled that the Fed will maintain the policy rate above zero. “Negative rates are not something we are looking at,” he said.

 

The U.S. has the highest infection cases of 1,375,542 cases as well as the highest death toll of 82,030 deaths. Goldman Sachs just revised down U.S. 2Q GDP to a contraction of 39% before rebounding 29% and 11% in 3Q and 4Q, respectively.