Fed Will Keep Easy Policy Way After Coronavirus Subsides

The Federal Reserve has taken bold, unprecedented steps in the past two months to help mitigate the lasting damage to the U.S. economy caused by the coronavirus pandemic. If there was one overarching message from the Federal Open Market Committee’s first non-emergency decision since January, it was this: There will be no change of course anytime in the near future.

As expected, the central bank on Wednesday left its benchmark interest rate unchanged at a range of 0% to 0.25%, and to the surprise of some analysts, it left the interest rate on excess reserves unchanged at 0.1%. But more notably, the FOMC statement drew a clear distinction between the imminent risks from the Covid-19 outbreak and those that will linger long after the country reopens: “The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”