Fed sees U.S. economic growth surging to 6.5 percent this year

Despite the surge in growth, the Fed isn’t in any hurry to raise borrowing costs, projecting no interest rate increases through 2023 — a stance that sent the stock market soaring. Fed Chair Jerome Powell has rejected fears that more direct checks to Americans from the federal government will lead to troubling price spikes, doubling down on the Fed’s pledge to keep interest rates low to allow as many people back into the labor force as possible.

Inflation has remained muted for years, despite warnings that it was bound to accelerate because of the Fed’s low-rate policy.

Even as Fed officials expect unemployment to drop to 3.5 percent in 2023, they still expect inflation to hover around 2 percent for the next couple of years.

A few policymakers do think the central bank could hike rates as early as next year, but they’re the minority on the 18-member rate-setting committee.