The Federal Reserve left interest rates unchanged Wednesday and committed to maintaining its unprecedented stimulus plan until the economy “has weathered recent events.”
The central bank acknowledged the “tremendous human and economic hardship” that the coronavirus pandemic has brought upon people around the world, and it doesn’t think the economic difficulties will let up anytime soon: The Fed updated its economic projections for the year, predicting a 6.5% drop in gross domestic product, the broadest measure of the economy, in 2020.
By December, the Fed expects the unemployment rate to fall to 9.3%, down from 13.3% in May.
The Fed slashed interest rates to near zero in March at the outset of the coronavirus pandemic. Since then, the central bank has committed billions of dollars to supporting financial markets, businesses, and state and local governments.
Even though Fed Chairman Jerome Powell has vehemently opposed negative interest rates, which other developed world central banks have had to revert to, voices supporting negative rates from within the Federal Reserve network are getting louder.