Federal Reserve maintains interest rate in the US and predicts 6.5% GDP retraction


O Federal Reserve, the North American central bank, decided on Wednesday, 10, to keep interest rates in the United States in the range between 0% and 0.25% per year. Furthermore, the monetary authority has also indicated that rates should remain at this level until at least 2022.

Fed officials also projected that the US economy is expected to contract by 6.5% in 2020 due to the negative impacts generated by the new coronavirus pandemic.

However, the central bank predicts that the US Gross Domestic Product (GDP) will grow 5% in 2021, followed by a 3.5% expansion in 2022.

The Fed hopes to maintain the woods until it is sure that the country’s economy has withstood events influenced by the covid-19. In addition, the central bank said that “it is on track to achieve its maximum employment and price stability targets”.

Photo: Andrew Harnik

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