The US Fed is concerned about the existing economic situation. The Fed’s Сhairman and US former President are still stating that the country’s economy is quite healthy. However, at the moment, indicators of the US stock market are reflecting the real state of affairs, including the ultra-loose monetary policy.
The global economic slump, political turbulence as well as problems in the business sector and the second wave of the coronavirus pandemic have a significant influence on the US stock market. Indices are still afloat only due to the Fed’s unprecedented money-printing program. The regulator constantly repeats that there is no need to worry about higher rates. It launches one QE program after another and is planning to issue a large amount of money to boost markets and the country’s economy. However, it is not enough to improve such aspects as investment in business, inflation, and consumer spending. These three problems are likely to wreck the economy despite the Fed’s policy.
Nevertheless, the Fed’s approach is tougher than those chosen by other leading central banks. Thus, the ECB, the Bank of Japan, and some other central banks are holding their key interest rates at even lower levels. That is why the Fed’s decision to keep the benchmark rate unchanged looks really aggressive.
