The Federal Reserve is providing “strong support” to the U.S. economy in the News Bank

The U.S. central bank said in a report twice a year on the monetary policy released on Friday that it intended to keep interest rate policies low until further progress was made in recovering the COVID-19 recession.

The U.S. Federal Reserve has said its low interest rate policies provide “strong support” to the economy as it heals from the coronavirus pandemic.

In a report to Congress twice a year on monetary policy released on Friday, the Fed said it planned to maintain that support until further steps were taken to recover from last year’s severe recession.

In the first half of this year, advances in coronavirus vaccines helped reopen the economy and lead to strong economic growth, according to Fed, but said the lasting effects of the COVID-19 pandemic continue to weigh on the economy, with employment still there. below previous pandemic levels.

The Fed has kept its benchmark interest rate close to zero as it continues to buy $ 120 billion a month in Treasury bonds and mortgage-backed securities to put downward pressure on long-term interest rates. He said on Friday that these efforts “will continue to provide strong economic support to the monetary policy until it is fully revived.”

The new report will be the subject of a two-day hearing next week. Faith President Jerome Powell will testify before the House Financial Services Committee on Wednesday, and before the Senate Banking Committee on Thursday.

MPs will look for details on exactly when the central bank will start reducing bond purchases and when it will start raising interest rates.

The report on Friday repeated the writing used by the central bank last year, explaining that it does not expect interest rates to start rising until it reaches its maximum employment and inflation targets.

The Fed also confirmed that it expects bond purchases from a month ago to remain at the $ 120 billion level until “significant progress” is made on achieving employment and inflation targets.

Shortages of materials and difficulties in contracting have hindered several industries and bottlenecks this year and other transient factors have driven inflation, according to the report.

“Consumer price inflation has risen sharply this spring as rising demand has once again increased production coverage and procurement difficulties,” the report says.

But the report echoed the views of Powell and other Fed officials, which could surely lead to a temporary rise in inflation.

“As these unusual circumstances pass, supply and demand should move closer to balance, and inflation is expected to fall,” the report says.

Discussions at the Fed’s last meeting in June showed that the central bank had begun to look at when and how to reduce bond purchases, but that no conclusions had been reached. Most private economists do not expect a real bond reduction to begin until the end of this year, or perhaps until the beginning of 2022.