The Federal Reserve kept its key lending rate unchanged Wednesday, and pledged to keep it at near zero percent until at least the end of 2023 as the economy continues to run at well below pre-pandemic levels.
The Fed also kept the pace of its bond buying program, which is currently snapping up $120 billion each month, unchanged, and noted that its broader strategy of accommodation will remain in place until "substantial further progress" has been made in meeting the central bank's employment and inflation goals. In that respect, the Fed indicate it will continue to buying bonds at its current pace for at least most of next year.
"The path of the economy will depend significantly on the course of the virus," the Fed said. "The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term."
The Fed said it will "take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments" in assessing its next policy move, while essentially vowing to be data-dependent.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% higher, but close to a two-and-a-half year low of 90.54, while benchmark 10-year Treasury note yields edged modestly higher to 0.941%.
U.S. equities were also unmoved by the Fed decision, with the Dow Jones Industrial Average falling 90 points on the session, while the S&P 500 was marked 1.5 points lower from last night's close.