Federal Reserve leaves interest rates near zero

July 28 (UPI) -- The Federal Reserve left its benchmark lending rate unchanged Wednesday, saying the U.S. economy is recovering from the effects of the COVID-19 pandemic even as case numbers rise again.

The Federal Open Market Committee concluded its two-day meeting with a statement saying interest rates will remain at 0% to 0.25%, the same level since March 2020, the beginning of the economic downturn.

"With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen," the FOMC said.

The organization said the business sectors most damaged by the economic downturn have improved, but not fully recovered, and inflation has risen. The overall future of the economy continues to depend on the effects of the virus.

"Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain," the FOMC statement said.

Federal Reserve Chairman Jerome Powell, said the economy still had a ways to go before achieving stable prices and maximum employment.

"We have some ground to cover on the labor market side," Powell said during a post-meeting press conference. "I think we're some way away from having had substantial further progress toward the maximum employment goal. I would want to see some strong job numbers."

Separately, the Fed announced the establishment of two repurchasing -- or repo -- agreement facilities. One will be for domestic markets, while the other will be for foreign and international banks.

"These facilities will serve as backstops in money markets to support the effective implementation of monetary policy and smooth market functioning."

The major indexes turned in a mixed day of trading amid the news as the Dow Jones Industrial Average fell 127.59 points, or 0.36%, while the S&P 500 closed mostly flat, dropping 0.019% and the Nasdaq Composite gained 0.7%.

Overall, the major averages are on track to end July on a positive note with the S&P 500 up 2.4% for the month, while the Nasdaq and Dow have risen 1.8% and 1.2%, respectively.