3 In addition to the very low federal funds rate, the FOMC has provided monetary policy stimulus through large-scale purchases of longer-term Treasury debt, federal agency debt, and agency mortgage-backed securities (MBS). A range of evidence suggests that these purchases helped improve conditions in mortgage markets and other private credit markets and put downward pressure on longer-term private borrowing rates and spreads.
Over the medium term, it is important to emphasise that while the rate of growth in the economy is set to rise only gradually, with a faster uptick contingent upon further reforms, South Africa’s macroeconomic framework and strong set of institutions continue to display remarkable resilience under challenging conditions. This is no accident.