Fed will reiterate promise to use all tools to support economy

US, WASHINGTON (ORDO NEWS) — The Federal Reserve, which urgently poured trillions of dollars into the US financial markets to limit the damage from the coronavirus pandemic, is expected to reiterate its promise on Wednesday to do everything it can to support the world’s largest economy.

The US Central Bank may also signal how long and by what principle it plans to keep interest rates near zero after the start of economic recovery.

No one expects officials to make detailed forecasts for the economy, given the uncertainty surrounding the impact of the virus before a cure or vaccine is found.

“We do not expect any discussion of the forecast because it is still incomprehensible,” said Michael Feroli of JPMorgan.

The Fed, which responded to the current crisis by lowering interest rates, resuming asset purchases and insuring credit markets, will announce the results of the meeting at 21.00 Moscow time.

The press conference of the head of the regulator Jerome Powell will begin at 21.30 Moscow time.

The Central Bank statement is likely to reflect a sharp deterioration in labor market estimates, household spending, energy markets and inflation forecasts from the last meeting in March, before the US states significantly limited economic activity.

The Fed may also hint at how long it will continue to support the economy.

“We expect the committee to set out specific inflation and unemployment thresholds that need to be overcome before the committee begins to consider raising the target range for federal funds,” the Barclays economists note.

The Fed is not expected to announce new programs, but Powell is likely to be asked about options for further action, given his comments in March that the Fed will “run out of ammunition.”

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