To provide additional support to the U.S. economy, battered by the coronavirus pandemic, the Federal Reserve has voted to keep the benchmark short-term rates near zero through 2022. Thus, apart from the interest rate move, Fed’s commitment to continue to purchase Treasury and mortgage securities will probably boost the economy.
Fed Keeps Interest Rates Near Zero
Fed Chairman Jerome Powell said that they are not even thinking of raising rates. Notably, in the rate-setting meetings, all 17 Federal Reserve officials voted for holding rates near zero till next year. In fact, 15 of the officials hinted at holding the rates through 2022.
In addition, Fed will continue to increase its bond holdings. Thus, Fed has decided to maintain the current pace of monthly bond purchases of $80 billion in Treasuries and $40 billion in mortgage securities.
Unemployment to Fall, GDP to Grow Next Year
Importantly, Fed’s commitment of providing more support to the economy will boost growth and reduce unemployment. Majority of the Fed officials now project the jobless rate to decline to 9% to 10% during the last three months of 2020 from May’s 13.3%.
Moreover, although projections of Fed officials suggest that the economy will contract 4% to 10% in 2020, recovery is expected next year. Notably, most of the officials are expecting the economy to grow 5% in 2021.
4 of the Best Growth Stocks to Buy
Overall, the broader market is poised to gain since Fed’s additional measures have come at a time when the economy is gradually reopening. Lockdown restrictions are easing and people are returning to work. Thus, to outdo market returns as well as take advantage of the aforesaid factors, we have used the Zacks Stock Screener to narrow down on stocks with solid prospects, sporting a Zacks Rank #1 (Strong Buy) along with Growth Score of A.
Headquartered in Melbourne, Australia, BHP Group BHP is a leading explorer and producer of oil and gas with presence in prolific resources. The company’s operations also include mining of copper, silver, zinc and other metals. Quarter to date, the stock has gained 43%, surpassing the S&P 500’s 23.6%.
For fiscal 2020, the stock has seen upward earnings estimate revisions in the past 30 days, as two of the four analysts have revised their estimated higher.
Murphy USA Inc. MUSA, headquartered in El Dorado, AR, is a leading independent retailer of motor fuel and convenience merchandise in the United States. The stock has seen upward earnings estimate revisions in the past 30 days for 2020. Murphy is also expected to see earnings growth of 68.3% in 2020.
Enviva Partners, LP EVA, based in Bethesda, MD, is a leading producer of producer of sustainable wood pellets in the world. The stock is likely to see earnings growth of 145% in 2020. Also, in the past 60 days, the stock has seen upward earnings estimate revisions for 2020.
Based in Phoenix, AZ, Sprouts Farmers Market, Inc. SFM is a leading provider of organic food products in the United States. In the past 30 days, Sprouts Farmers has seen upward earnings estimate revisions for 2020. Moreover, the stock is likely to see earnings growth of 33.6% in 2020.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Click to get this free report BHP Group Limited (BHP) : Free Stock Analysis Report Murphy USA Inc. (MUSA) : Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report Enviva Partners, LP (EVA) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research