Speed Reads

economic update

Fed promises to keep interest rates low for the next 2 years, calls on Congress to pass stimulus funding

The Federal Reserve made a long-term commitment to keep interest rates low on Wednesday.

In a press conference, Federal Reserve Chair Jerome Powell announced the Fed likely wouldn't raise interest rates from their current rock-bottom state until at least 2023. They'll remain close to zero "until the economy is far along in its recovery," Powell said — though he added that Congress should take some action to make sure that happens.

"Overall activity remains well below its level before the pandemic, and the path ahead remains highly uncertain," Powell noted Wednesday. After all, there's no definite answer for when a COVID-19 vaccine will become available and America will safely reopen. Stimulus payments did boost the economy for a bit, but some industries, including tourism and entertainment, "remain depressed," The New York Times notes. So until the economy reaches the Federal Reserve Board's "assessments of maximum employment" and inflation hits 2 percent, interest rates will remain low, Powell said.

Powell added Wednesday there's only so much the Fed can do to help the stumbling U.S. economy. "More fiscal support is likely to be needed," he said, alluding to the fact that Congress still hasn't replaced its stimulus bill that expired at the end of July. Powell noted that 11 million Americans are still out of work, small businesses are still struggling, and that state and local governments need funds — things that are all expected to be in a successful version of a COVID-19 stimulus bill, if it ever happens.