Federal Reserve officials expressed that there is a ‘long road to recovery’ ahead for the US economy, and that interest rates may stay at zero until the end of 2021. Fed Chair, Jerome Powell, suggested that it would be a long time until the central bank can withdraw their economic support and stimulus.
The dollar was weak before this announcement due to expectations the Fed would signal its intention to keep interest rates near zero. However, it is stronger this morning as demand for safe-haven currencies has increased.
US core inflation rate decreased to 1.2% year-on-year in May 2020 from 1.4% in the previous month and below market expectations of 1.3%. It was the lowest rate since March 2011.
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