The Federal Reserve is committed to supporting the U.S. economy as the COVID-19 pandemic continues to pose risks to public health and cause economic hardships. Though indicators show an improvement in economic activity and employment, the hardest hit sectors remain weakened by the pandemic. According to the March Federal Open Market Committee meeting statement, the Fed will continue to keep interest rates near zero as we as expand purchases of U.S. Treasury and mortgage-backed securities. What does that mean for you? Let’s rewind.
March 2021 FOMC Rewind
Quick explainer for the March FOMC decision (video, 1:12 minutes)
Transcript
Sean: Why is the Fed trending again, Renuka?
Renuka: They’re keeping interest rates close to 0%
Sean: Ohhh … that’s what everyone expected, right?
Renuka: Yeah! They also said they see some good signs in the economy. But some parts of it are still weak.
Sean: Hmm, I don’t get it. Tell me more.
Renuka: The good news is that more people are getting vaccinated, so people are feeling more confident. And with more jobs opening up, some people can get back to work.
Sean: Okay, what’s the bad news?
Renuka: Well, we lost so many jobs a year ago that it’s a long way to get back to full and inclusive employment.
Renuka: And, while people are buying more stuff, stores that offer services, like gyms and theaters, are still hurting.
Sean: Is there a silver lining?
Renuka: Actually yes! The Fed said government stimulus and low interest rates on loans are helping.
Sean: So they plan to keep interest rates low?
Renuka: Yes, until the economy gets back on its feet with plenty of jobs and prices rising gradually
Sean: Thanks for ending on a high note!
Renuka: You’re welcome! Stay healthy!
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The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.