Fed Says Financial Conditions Remain ‘Accommodative,’ No Rate Hikes Expected

Originally published on March 17, 2021, by Mike Sorohan for MBA Newslink. 

The Federal Open Market Committee yesterday acknowledged a fast-heating U.S. economy, but said it did not expect increases in the federal funds rate before 2023.

The FOMC said the effects of the coronavirus pandemic continue to cause “tremendous human and economic hardship” in the U.S. and around the world. It said while economic growth remains dependent on the continued response to the pandemic, it nonetheless acknowledged indicators of economic activity and employment have “turned up” recently, and that overall financial conditions remain “accommodative.”

“The FOMC’s latest projections show that more members anticipate a first rate hike in 2023, even while the median member sees rates unchanged through that year,” said Mike Fratantoni, Chief Economist with the Mortgage Bankers Association. “This reflects the current expectation of more rapid economic growth, faster movement towards full employment, and a higher rate of inflation as a result of the American Rescue Plan and the growing success of the vaccine rollout. MBA’s forecast is aligned with this expectation of a rapidly improving economy through the remainder of 2021.”

Read More
Share this post: