The Federal Reserve pledged to support the economic recovery by setting a higher bar to raise interest rates and by signaling it expected to hold rates near zero for at least three more years. In new projections released after a two-day policy meeting, all 17 officials who participated said they expect to keep rates near zero at least through next year, and 13 projected rates would stay there through 2023, the Wall Street Journal noted.
- Bottom line: The new economic projections showed most officials expected interest rates to stay near zero over the next three years, even if inflation reaches 2% and the unemployment falls to around 4%.
- Property owners are beneficiaries: Keeping interest rates low makes Refi’s and acquisition financing more attractive. The Fed also said it will continue buying mortgage-backed securities to help ensure that banks keep lending during the downturn. [WSJ+TRD]