Fed Sees Growth Surge, Jump In Inflation In 2021 But No Change On Rates

• The Federal Reserve on Wednesday repeated its pledge to keep its target interest rate near zero for years to come after projecting a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down.
• The U.S. central bank now sees the economy growing 6.5% this year, which would be the largest annual jump in the gross domestic product since 1984, and the unemployment rate falling to 4.5% by year's end. This is higher than the GDP growth and unemployment rate projections of 4.2% and 5%, respectively, made in December.
• The pace of price increases is now expected to exceed the Fed's 2% target for the year, hitting 2.4% by year's end before falling back in 2022.
• "Indicators of economic activity and employment have turned up," the central bank's policy-setting Federal Open Market Committee said in a statement that kept the benchmark overnight interest rate in a target range of 0% to 0.25%.
• The improvement in the Fed's economic outlook did not immediately alter policymakers' expectations for interest rates, though the weight of opinion did shift. Seven of 18 officials now expect to raise rates in 2023, compared to five in December.

(Source: Reuters)