US Fed Reserve Holds Rates Near Zero; Signals Low Rates For 3 Years

The US Federal Reserve concluded its latest policy meeting on Wednesday leaving interest rates near zero and indicated that rates would stay the same through 2023. The American central bank said short-term rates would remain targeted at 0-0.25 percent.

The officials also revised their economic forecasts to reflect a smaller change in GDP and a lower employment rate in 2020.

All but four members of the committee indicated that rates could stay anchored near zero through 2023.

In addition, the Fed addressed a new policy regime wherein the central bank will allow inflation to run somewhat above the 2 percent target before its rates were hiked to control inflation.

"These changes clarify our strong commitment over a longer time horizon," said Chairman Jerome Powell at his post-meeting news conference.

The committee added that "it will be appropriate to maintain this target range until labour market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time."

After the release, stocks in the US markets gained while international gold prices remained flat.