Calling the COVID-19 economic downturn the most severe "in our lifetime", Federal Reserve Chairman Jerome Powell stressed that there is a long road ahead to get back to where the US economy was only months ago and noted that more fallout from the virus lies ahead.
"We are not even thinking about thinking about thinking about raising rates", Powell said, noting the economic recovery will take a long time because millions of people working in heavily affected industries like hotels or restaurants won't have jobs to go back to any time soon.
Powell also said that not all sectors of the economy were weakening, citing housing as one bright spot.
A Fed statement said there were signs of an economic pick up recently.
"Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year", the Fed said in its statement on Wednesday.More news: France sinks deeper into recession, with 14% GDP hit in 2Q
U.S. stocks added to gains after the Fed's statement, while longer-term U.S. Treasury yields moved slightly higher.
Explaining the reason behind the rise, Amit Sajeja, Associate Vice President at Motilal Oswal said, "Gold price has been rising due to two major reasons - U.S. dollar collapsing to the tune of 5.5 per cent in the last ten forex trade sessions and United States bond yields nearly close to negative territory".
"I see Congress negotiating now over a new package and I think that's a good thing", he said.
All FOMC members voted to leave the target range for short-term rates between 0% and 0.25%, where it has been since March 15 when the virus was beginning to hit the nation.
The Fed said that over the coming months the Federal Reserve will increase its bond holdings "at least at the current pace".More news: Trevor Reed, former Marine, sentenced to nine years for assaulting Russian police
In a separate statement Wednesday, the Fed said it extended its dollar liquidity swap lines and the temporary repurchase agreement facility for foreign and global monetary authorities through March 31, 2021.
That aggressive action has helped to calm investors.
In his news conference, Powell elaborated on just how much remained unclear about the direction of the world's largest economy.
Gold prices fell sharply on Thursday, drifting away from a record peak hit earlier this week, as a slump in U.S. GDP and President Donald Trump's tweet about delaying the upcoming U.S. elections triggered a sell-off in financial markets.
Still, Powell made clear that the Fed was not pinning its hopes on a medical breakthrough. "The upside case - we've got that covered", he said.More news: Georgia camp with COVID-19 outbreak didn't require masks