The US Federal Reserve has kept the refinancing rate unchanged (https://www.federalreserve.gov/newsevents/pressreleases/monetary20210317a.htm). Investors’ expectations were confirmed, the rate remained at the level of 0-0.25%, and the US Federal Reserve will continue its program of buying up assets for at least $ 120 billion a month.
At the same time, the Fed changed its forecasts for economic growth and inflation. GDP is expected to increase by 6.5% in 2021 (previous forecast was 4.2%), unemployment is expected to drop to 4.5% (from the current 6.2%). Inflation expectations increased to 2.2%.
Despite the positive changes, most members of the federal committee believe that the rates will remain unchanged until 2023.
The market reacted with an increase in government bond yields: after the announcement of the rate and improved expectations regarding economic growth and unemployment, the yield on 10-year bonds rose by 0.04% to 1.662%, and 30-year bonds by 0.06% to 2.449%.