Interest Rates Projected To Stay Low Through 1st Half ’21

The Federal Reserve will do what it can to keep rates low.

The group recently reinforced its long-term strategy of suppressing rates for years — until at least 2023.

The Fed Meets again on January 26-27, 2021. Most analysts expect the same “loose money” stance it has taken since the outbreak of the virus.

The rate friendly stance is a boon for mortgage shoppers.

While the Fed doesn’t affect mortgage rates directly, its sentiment permeates the entire economy including interest rates of all kinds. But, the Fed hasn’t always been so generous. Until recently, it focused heavily on keeping inflation in check. While that’s still its mandate, it now puts more emphasis on propping up the economy in this time of duress.

The Federal Reserve is willing to let its policies drive inflation above its 2 percent goal for extended periods — a break from its previous strategy. That means it will keep rates low even after its economists see solid signs of inflation.

The group has transformed from an inflation-fearing body to a recession-fearing one.