Federal Reserve Holds Rates Near Zero

The Federal Reserve has decided to keep its benchmark interest rate between 0 and 25 basis points, citing a downbeat economic outlook due to the COVID-19 pandemic. The Fed acknowledges easier financial conditions but expects growth to contract by 6.5% this year, with unemployment reaching 9.3% by the end of 2020. Inflation is projected to remain below the 2% target. The Fed's dot plot indicates no change in rates through 2022, although some officials foresee a potential rate increase by then. The Fed remains committed to using its tools to support the economy and will incorporate health information into its assessments.

What is the current range for the Federal Reserve's benchmark interest rate?

• 0 to 25 basis points

• 25 to 50 basis points

• 50 to 75 basis points

• 75 to 100 basis points

By how much does the Fed expect the US economy to contract in 2020?

• 8%

• 7%

• 6.5%

• 5%

What is the projected unemployment rate by the end of 2020 according to the Fed?

• 7.5%

• 10%

• 8.5%

• 9.3%

What is the Fed's target inflation rate?

• 1.5%

• 1%

• 2%

• 2.5%

What is the long-term neutral rate for the federal funds rate as seen by the Fed?

• 3%

• 2.5%

• 2%

• 1.5%