Federal Reserve officials agreed at their most recent policy meeting that they would need to hold interest rates very low and continue central bank bond purchases to help spur the economy’s recovery from the effects of the coronavirus pandemic.
Most of them thought that the $900 billion federal stimulus package approved in December, the likelihood of more fiscal support and continued distribution of Covid-19 vaccines “would lead to a sizable boost in economic activity” this year, according to minutes of the Fed’s Jan. 26-27 meeting.
Still, they noted “the pandemic continued to pose considerable risks to the economic outlook” and they believed that maintaining their current policies “was essential to foster further economic recovery,” the minutes, which were released Wednesday, said.
Officials at the meeting “agreed that the economy remained far from the [Fed’s] longer-run goals and that the path ahead remained highly uncertain,” the minutes said.
Economic reports released since the meeting show the recovery picked up in the new year as consumers used stimulus checks to boost retail spending, manufacturers continued to increase output and employers resumed hiring.