The Federal Reserve kept the benchmark interest rate unchanged Wednesday, voting unanimously to keep the federal funds target rate in a range of zero to 0.25%, where it’s been since March.
The Fed also said it will continue its $120 billion-a-month bond-buying program "until substantial further progress has been made toward the Committee's maximum employment and price stability goals."
The asset purchases, the Fed said, "help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses."
"The covid-19 pandemic is causing tremendous human and economic hardship across the United States and around the world," the Fed said in a statement.
"The path of the economy will depend significantly on the course of the virus, including progress on vaccinations."
The ongoing public health crisis, the statement says, "continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook."
"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," the Fed said.
Weaker demand and earlier declines in oil prices have been holding down consumer-price inflation, the Fed said.
The committee said it wanted to achieve maximum employment and inflation at the rate of 2% over the longer run.
With inflation running persistently below this longer-run goal, the committee said it would aim to achieve inflation moderately above 2% "for some time so that inflation averages 2% over time and longer‑term inflation expectations remain well anchored at 2%."
The committee said it expected to maintain an accommodative stance of monetary policy until these outcomes are achieved.
Stocks had been weak on Wednesday and lost additional ground after the Fed statement before recouping a bit.