Federal Reserve pledges 'powerful support' for economy

The Federal Reserve says its low interest rate policies are providing “powerful support” for the economy as it recovers from the coronavirus pandemic

WASHINGTON -- The Federal Reserve says its low interest rate policies are providing “powerful support” for the economy as it recovers from the coronavirus pandemic. In its twice-a-year report to Congress on monetary policy released Friday, the Fed indicated that it planned to maintain that support until further progress is made in recovering from last year's severe recession. Over the first half of this year progress on vaccinations helped to re-open the economy and produced strong economic growth, according to the Fed, but it said the lingering effects of the pandemic continue to weigh on the economy, with employment still well below pre-pandemic levels. The Fed has kept its benchmark interest rate near zero while continuing to buy $120 billion a month in Treasury bonds and mortgage-backed securities to put downward pressure on long-term interest rates. It said Friday that these efforts will help ensure that “monetary policy continues to deliver powerful support to the economy until the recovery is complete.”