The U.S. Federal Reserve will keep interest rates near zero until labor markets tighten and inflation reaches 2 percent and “is on track to moderately exceed 2 percent for some time,” the central bank said in a statement on 16 September.
The Fed officials said they expect the benchmark interest rate to stay near zero through 2021.
Although employment fell to 8.4 percent in August from 14.7 percent in April, Fed chair Jerome Powell cautioned that the lower rate might partly be the result of people who have given up looking for work and so are no longer counted as unemployed.
More than two million people have been fired and 11 million more are jobless now than in February.
Powell renewed his call for Congress to offer aid to out-of-work households, struggling businesses, and state and local governments to avoid more damage to the economy.
TREND FORECAST: We forecast there will be more monetary methadone injections by Washington into the economy before Election Day, and next year… or earlier, the Federal Reserve will lower interest rates into negative territory, thus pushing the dollar lower and gold prices higher.
TRENDPOST: Repeating what we have been long forecasting, Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund with $138 billion under management, said last week that due to the U.S. Federal Reserve’s massive money pumping programs to pump up the U.S. economy with low interest rates and floods of dollars, the greenback’s position as the world’s reserve currency is in jeopardy
In July, Dalio urged investors into stocks and gold and out of bonds and cash because the latter two are likely to offer negative returns as the Fed keeps interest rates low and central banks will continue to create more digital money.
The Bloomberg Dollar Spot Index has fallen 10 percent from its high value in mid-March. Since then, all of the developed world’s currencies, as well as precious metals, have gained value against the dollar.
