NEW YORK, April 29 (Reuters) - Federal Reserve policymakers on Wednesday left interest rates near zero and repeated a vow to do what it takes to shore up the economy, saying the ongoing coronavirus pandemic will "weigh heavily" on the near-term outlook and poses "considerable risks" for the medium term.
HIGHLIGHTS:
- Fed keeps target interest rate unchanged at 0-0.25 pct, says will stay there until economy has weathered recent events and on track to achieve employment and inflation goals
- Fed says keeps interest on excess reserves rate at 0.10 pct
- Fed says health crisis poses considerable risks to economic outlook over the medium term
- Fed says will continue buying Treasury, agency residential and commercial mortgage-backed securities in amounts needed to support market functioning and effective monetary policy transmission
- Fed says will continue to offer large-scale overnight and term repo operations
- Fed says it is committed to using its full range of tools to support the U.S. economy
MARKET REACTION:
STOCKS: U.S. stocks holding strong, with the S&P 500 up 2.81% BONDS: The 10-year U.S. Treasury note yield rose to 0.6206% and the 2-year yield to 0.1994%
FOREX: The dollar index extended a bit lower and was down 0.35%
JOHN DOYLE, VICE PRESIDENT, DEALING AND TRADING, Monex INC, WASHINGTON
“We think the decision was widely expected and we agree with the sentiment that risks are considerable over the medium term. Due to the fact the Fed had announced new policies between scheduled meetings, we were not expecting any changes today,”
“I think Powell’s press conference will carry more weight. We are hoping for forward guidance but we also understand that he might not be able to give clear guidance due to the uncertainty that this virus is still causing.”
