The Federal Reserve said it would hold benchmark interest rates at their current level and continue increasing holdings of U.S. Treasurys and mortgage bonds at least at the current pace or as needed “to sustain smooth market functioning.”
- The statement is in keeping with economists' expectations for the U.S. central bank to take no new monetary policy actions.
- "Weaker demand and earlier declines in oil prices have been holding down consumer price inflation," according to the Fed statement, which noted the "COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world."
- "Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses."
- "The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment and inflation in the near term, and poses considerable risks to the economic outlook over the medium term."
- The Fed has expanded its balance sheet by about $3 trillion this year to $7.1 trillion, sparking fears of future inflation that have bolstered investor demand for bitcoin, seen as a hedge against rising consumer prices and a weakening dollar.
- Bitcoin (BTC) prices have doubled this year to roughly $15,000.
Read More: Bitcoin Likes Biden (and Fed’s Powell) as Price Approaches $15K
Disclosure
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.