The results of the FOMC policy meeting met market expectations after they decided to keep the interest rate unchanged at 0.00-0.25% and increase bond purchases.
The Federal Reserve (Fed) will continue to increase its treasury bond holdings by at least $ 80 billion a month and mortgage-backed securities at least $ 40 billion a month until greater progress has been made on employment and inflation.
Fed chairman Jerome Powell in a follow-up statement earlier this morning said the central bank had the ability to buy more bonds and remain open to increase asset purchase measures as appropriate.
Meanwhile, in the latest economic outlook, the central bank reduced its expected economic downturn expected to contract by 2.4% from the 3.7% contraction seen in September.
The Fed also raised expectations that the US economy would grow at a faster pace in 2021 with a growth of 4.2% compared to the previous 4% expectation and in 2022 the economy rose 3.2% from 3%.
In addition, the projection for the inflation rate is unchanged at 1.2% for 2020, while next year, inflation will increase slightly to 1.8% and in 2022, up 1.9%.
10-year treasury yields rose after a follow-up statement from the Fed to around 0.94%, prompting a surge in the US dollar, but plunged lower after the market swallowed a central bank statement.
