- The Washington Times - Wednesday, June 10, 2020

The Federal Reserve on Wednesday said it was keeping benchmark interest rates at or near zero and reiterated that those rates would stay there until officials are confident the economy has sufficiently weathered the recent coronavirus-related damage.

Federal Reserve Chairman Jerome Powell said they are committed to using the Fed’s “full range of tools” to assist in the ongoing economic recovery.

Central bankers also released a median projection that U.S. GDP would drop 6.5% in 2020 before rebounding to increase by 5% in 2021 and 3.5% in 2022.

Fed officials also projected that the U.S. unemployment rate would drop to 9.3% by the end of the year under a median forecast.

The Labor Department reported last week that the U.S. unemployment rate unexpectedly dropped to 13.3% in May, but Mr. Powell said some classification issues likely understated the true unemployment picture in the country.

“The severity of the downturn will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery when the public health crisis passes,” he said.

As he has in the past, Mr. Powell stressed that the Fed has lending powers and not spending powers.

“The Fed cannot grant money to particular beneficiaries,” he said.

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