Fed Maintains Zero-Rate Outlook, Says Inflation Will Be Short-Lived

Officials left interest rates near-zero though 2023, at least, and pledged continued support of businesses and consumers, despite the vaccine and stimulus-fueled recovery.

article-image

Jerome Powell, chair, Federal Reserve, Blockworks Exclusive Art by Axel Rangel

share

key takeaways

  • Interest rates will stay near-zero through 2023, at least
  • Asset purchasing will continue at $120 billion/month

Federal Reserve Chairman Jerome Powell and colleagues met Wednesday, and as strides continue to be made toward recovery, the economy remains far from the Fed’s goal. Officials left interest rates near-zero though 2023, at least, and pledged their continued support of businesses and consumers, despite the vaccine and stimulus-fueled recovery. 

“Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the Federal Open Market Committee said in its Wednesday policy statement. “Inflation continues to run below 2%.”

Seven of 18 FOMC officials predicted rates will be higher by the end of 2023, compared with five of 18 at the December 2020 meeting, according to the quarterly economic projections released Wednesday. 

Officials remain optimistic that an inflation bump later this year will be short-lived. Excluding food and energy, inflation is forecast to reach 2.2% this year before falling to 2% in 2022, according to projections. 

Treasury yields remained close to their highest levels since before the pandemic, hitting a 13-month high of 1.685% Wednesday. 

Policymakers decided to leave the target range of benchmark federal funds at 0% to 0.025%, where it has been since March 2020. 

Asset purchases were also left unchanged at $120 billion a month. Officials stressed that this pace will be maintained until “substantial further progress” is made toward lowering unemployment and minimizing inflation.

Learn more about today’s news: sign up for our daily newsletter by Tyler Neville and understand the crypto market in 5 minutes

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

TAPEDRIVE says it can make Solana data storage 1,400x cheaper

article-image

Immigration changes are papering over a fragile labor market

article-image

BlueYard’s head of crypto research developed FreePay to make fee-free, tap-to-pay crypto payments a reality

article-image

Buzzwords include: succinct universal proofs, zkVM, incrementally verifiable computation, distributed supercomputer and agentic AI

article-image

US dollars might technically be worth less, but it’s still good news

article-image

Apps are doing well, as is casino gaming, says Tom Schmidt of Dragonfly