The US Federal Reserve has maintained its benchmark interest rate range at near-zero and indicated it will do so until 2023, with the aim of keeping borrowing costs ultra-low until the labour market recovers and inflation picks up.

The rates staying unchanged was in line with market expectations and previous announcements by Fed chair Jerome Powell that he was not even considering raising rates in the near term and that negative rates were not on the cards.

At his press conference after the announcement, Powell cautioned that the “path ahead remains highly uncertain,” even amid an up-tick in overall economic activity and household spending, and signs of green shoots in business investment.

Powell continued to warn that the economy was dependent on the coronavirus outbreak and a full recovery could not be expected until people feel safe to go back to pre-pandemic levels of normal behaviour.

“The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the Fed said in a statement.

Powell told reporters he believed that Congress would need to pass an additional stimulus bill to help the recovery.

“More fiscal support is likely to be needed,” he said.

In addition to dropping rates as the pandemic hit, the central bank has also set up loan facilities and is buying bonds, including corporate debt.

The Fed said it would keep up the buying of US Treasuries and agency mortgage-backed securities “at least at the current pace to sustain smooth market functioning,” adding that this would ensure the flow of credit to households and businesses.

The US central bank, in its projections, indicated it expected no rate increases before 2023.