Fed notes improving economy, a step toward easing support

The Federal Reserve said Wednesday that the economy is strengthening and making progress toward its employment and inflation goals, a small step closer to dialing back its ultra-low-interest rate policies

WASHINGTON -- The Federal Reserve said Wednesday that the U.S. economy is strengthening and making progress on the Fed's employment and inflation goals, a small step toward dialing back its ultra-low-interest rate policies. The statement the Fed issued after its latest policy meeting said that ongoing vaccinations were helping the economy. But it dropped a sentence it had included after its previous meeting that said those vaccinations have reduced the spread of COVID-19. That was the only reference to the delta variant that has caused a spike in COVID cases in several hotspots in the United States and many other countries. The central bank said it’s keeping its benchmark short-term rate pegged at nearly zero, where it has remained since the pandemic tore through the economy in March 2020. The Fed is also buying $120 billion in Treasury and mortgage bonds each month — purchases that are intended to lower rates on longer-term consumer and business loans to spur more borrowing and spending. The Fed’s latest policy statement comes as the economy is sustaining a strong recovery from the pandemic recession, with solid hiring and spending. But it also coincides with uncomfortably high inflation and concerns about the spread of the delta variant.