Fed Holds Interest Rates Near Zero, Sees Faster Growth And Higher Inflation

• The Federal Reserve on Wednesday kept its easy monetary policy in place despite an economy that it acknowledged is accelerating.
• As expected, the U.S. central bank decided to keep short-term interest rates anchored near zero as it buys at least $120 billion of bonds each month. The latter part of the policy is a two-pronged effort to support an economy that grew strongly to start 2021 as well as to support market functioning at a time when 30-year mortgages still go for around 3%.
• Despite noting the economic strength and inflation that is on the rise, even if only temporarily, the policymaking Federal Open Market Committee unanimously decided to make no changes in its approach and gave no indications that things will change anytime soon.
• Fed Chairman Jerome Powell said the recovery is “uneven and far from complete.” While he noted that inflation pressures could rise in the coming months, these “one-time increases in prices are likely to only have transitory effects on inflation.”

(Source: CNBC)