The House Financial Services Committee will hold a hearing on Tuesday with the Federal Reserve and the Treasury Department on their responses to COVID-19.
The hearing titled, “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response,” will feature testimony from Steven Mnuchin, Secretary, the U.S. Department of the Treasury and Jerome Powell, Chair, of the Federal Reserve.
Previously, the Fed announced that interest rates will remain at 0 to .25% “until it is confident” the economy has recovered from COVID-19 and on track to achieve maximum employment and price stability.
The Fed also announced over the coming months that it will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities “at least at the current pace” to sustain smooth market functions.
“The Committee will closely monitor developments and is prepared to adjust its plans as appropriate,” the Fed said.
According to projections by the Fed, it does not project for interest rates to rise above 1% until 2022.
In March, the Fed dropped interest rates to zero in an emergency measure to combat the immediate effect of the coronavirus.
First American Financial's Deputy Chief Economist Odeta Kushi said the Fed is following through on their commitment to "do anything it takes for as long as it takes" to mitigate the impacts of COVID-19, including policies that impact the mortgage markets.
“The Fed is a gigantic ready-buyer in the secondary market, generating demand that increases MBS prices and lowers yield for investors—this results in lower mortgage rates," she said.
George Ratiu, realtor.com's Senior Economist, echoed Kushi's statement, saying the Federal Reserve "remains committed" to providing liquidity to the financial system and the economy.
Here's what else is happening in The Week Ahead:
NAR Pending Home Sales Index (Monday)
CoreLogic’s Case-Shiller (Tuesday)
Census Bureau Construction Spending Report (Wednesday)