Federal Reserve officials predicted that they would keep interest rates close to zero through 2022, as the US central bank said it remained “committed” to bolstering the economy hit by the pandemic.

The dovish tone from the Fed, which is expecting the US economy to contract by 6.5 per cent this year, with unemployment falling to 9.3 per cent, followed an earlier than expected rebound in job creation last month, which raised hopes of a faster recovery.

In a policy statement that contained no new actions and was mostly unchanged compared with April, the Federal Open Market Committee said: “The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals”.