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Fed pledges to use all tools to support US economy

Fed pledges to use all tools to support US economy

The US financial authorities have pledged to support the economy for as long as it takes. They also promised not to leave Americans to fend for themselves in dealing with the consequences of the COVID-19 pandemic. The Federal Reserve commits to using all its tools to promote the recovery.

However, the regulator has few useful tools left at its disposal. Therefore, the only help the economy can count on is a further monetary policy easing or money printing. All in all, the latest FOMC report revealed nothing new. The current state of the US economy has been called satisfactory. It is gradually recovering but the pace is not enough to tighten monetary policy. This means that the central bank does not plan to increase the interest rate in the short term.

The Fed’s message is clear. Recently, the policymakers have repeatedly tried to reassure market participants, and, most importantly, institutional investors who are currently selling off their assets and closing positions.

By committing to "provide the economy with the support that it needs for as long as it takes", the Fed shows that it will continue to bolster the US economy. This in turn means that investors can expect that corporate profits will grow along with share prices.

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