UPDATE - US Federal Reserve keeps interest rate unchanged

ADDS COMMENTS BY FED CHAIR JEROME POWELL

By Ovunc Kutlu

ANKARA (AA) - The US Federal Reserve said Wednesday it kept its benchmark interest rate unchanged between the 0.00% - 0.25% range during its last scheduled meeting in 2020.

The Fed said "economic activity and employment have continued to recover but remain well below their levels at the beginning of the year," in a statement regarding its Dec. 16 meeting.

"The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic," it said.

"The path of the economy will depend significantly on the course of the virus, including progress on vaccinations," it added.

The central bank still seeks to achieve maximum employment and inflation at the rate of 2% for the long-term, noting it will maintain its accommodative stance of monetary policy until the target is achieved.

The Fed held two emergency unscheduled meetings March 3 and March 15, lowering its benchmark interest rate to historically low levels to respond to the economic slowdown caused by the coronavirus.

The bank is expected to continue its asset purchasing program to buy bonds from the market to support the economy, and Fed Chair Jerome Powell said it would be too soon to curb purchases.

"The whole focus on exit is premature if I may say. We’re focused on finishing the job we’re doing, which is supporting the economy, giving the economy the support it needs," he said in a news conference after the decision.

He also stressed that it is too soon to talk about any date regarding when the bank would start raising its interest rate, adding the Fed will continue to support the US economy.

As more people get vaccinated, consumer spending would increase, according to Powell, who believes inflation would see slight increases in the coming months.

"We’re going to be patient. We expect to wait and see ... very likely to be transient, effects on inflation," he said.

As 10 million people remain jobless in the world's largest economy, Powell reiterated his stance that the Fed wants to achieve maximum employment. "We want the potential output of the US as high as it can possibly be," he said.