At its scheduled Federal Open Market Committee (FOMC) meeting, the Federal Reserve announced that it would keep the target range for the federal funds rate at 0 to 0.25 per cent. The Committee expects to maintain this target rate until labour market conditions are at levels that is consistent with the Committee’s assessment of maximum employment and inflation has risen to 2 per cent and is on track to moderately exceed 2 per cent for a period so that inflation averages 2 per cent over time.

Additionally, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and agency mortgage-backed securities by at least $40 billion per month. The Federal Reserve expects to continue this until substantial progress has been made towards the goals of maximum employment and price stability. This is expected to provide support to the flow of credit to households and businesses and ensure smooth functioning of the financial markets.

The US Federal Reserve noted that the COVID-19 pandemic is causing human and economic hardship. With progress on vaccinations and strong policy support, economic activity and employment have strengthened. Inflation has risen due to transitory factors. The path of the economy depends to a significant degree on the course of the virus and vaccinations with the Federal Reserve stating: "The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain". 

Source: US Federal Reserve, FOMC Statement