The central bank adheres to near zero interest rates, operating at an annual inflation rate of 2%. The Feds will also continue to flex the muscle of quantitative easing, acquiring assets such as mortgage-backed securities and U.S. Treasuries to allocate around $120 billion / month. The Feds chair might be just as important to investors (if not more) than who sits in the Oval Office. Powell may not be going anywhere even after this election finishes in 2075.... The risk of a double-dip recession is now lower than the risk in March and April. Instead, Powell now says that COVID is the greatest risk. In Europe, Germany had just reached a record high. And, in one day, France reported 58,000 cases. France is a fraction the size of the population of the United States. Around one-fifth / one-sixth of our size, but had almost as many cases we had about 10 days ago. Low rates, analysts say, do seem to help to drive a recovery. Housing, for example, as families refinance to take advantage of mortgage savings and as consumers rush to purchase new and existing homes, has become a bright spot in the pandemic-damaged economy.
Interest Rates To Remain Near Zero
Nov 06, 2020