WASHINGTON, July 1 – Federal Reserve policymakers agreed broadly to make full use of the tools at the central bank’s disposal to help foster a recovery from the recession triggered by the coronavirus pandemic, minutes of the U.S. central bank’s last policy meeting showed.
The readout on Wednesday of the policy discussion, at which policymakers unanimously voted to keep interest rates near zero amid an economic slump caused by the novel coronavirus epidemic, also showed Fed officials anticipate the worst economic downturn since World War Two and they have no intent to let up on providing stimulus for the foreseeable future.
“Members noted that they expected to maintain this target range until they were confident that the economy had weathered recent events and was on track to achieve the Committee´s maximum-employment and price-stability goals,” the Fed said in the minutes of the June 9-10 meeting.
The Fed has repeatedly said the U.S. economic outlook remains highly uncertain and reiterated that a full economic recovery hinges on the virus, which has killed more than 127,000 people in the United States, being brought under control.
Since the meeting, a surge in U.S. infections has led several policymakers to warn that signs of a nascent economic recovery over the last few weeks could already be under threat as hard-hit states halt or reverse the re-opening of their economies.
The U.S. economy slipped into recession in February and economic output and employment are still far below pre-crisis levels despite a rebound as restrictions were eased. More than 30 million people were receiving unemployment checks in the first week of June, about a fifth of the labor force.
At last month’s policy meeting, the Fed signaled it planned years of extraordinary support for the economy, with policymakers projecting the economy to shrink 6.5% in 2020 and the unemployment rate to be 9.3% at the end of the year.
In addition to slashing interest rates, the central bank has also pumped trillions of dollars into the economy to keep credit flowing to businesses and households.
Americans’ anxieties over the spread of the coronavirus are at the highest level in more than a month, a Reuters/Ipsos poll showed on Wednesday, a day after the United States recorded the biggest single-day rise in new cases since the pandemic began. (Reporting by Lindsay Dunsmuir; Editing by Paul Simao and Lisa Shumaker)