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.


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


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


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


Accredited and non-accredited investors worldwide will be able to purchase the Note starting Dec. 6 on US-regulated trading platform INX


Bitcoin’s next halving is less than five months away. History says they’re bullish but will this time be different?


Merger is set to allow the combined business to “flex between our different lines of business,” Hut 8 CEO says


Agency’s decision to start comment window earlier than expected could be bullish for spot bitcoin ETF approval in January, industry watchers say


Jump Crypto is the trading firm at the center of Terra-related market manipulation allegations


Funds tied to Coinbase co-founder Fred Ehrsam have made the most of the COIN rollercoaster