Federal Reserve believes economy improving
The Federal Reserve believes the economy is improving, but not enough to warrant a change in its stimulative policies just yet.
its approximately 17 members of the Federal Open Market Committee revised their economic forecasts Wednesday, predicting the unemployment rate will fall to between 7.8% and 8% by the end of the year.
Many improvements from what the Fed had previously anticipated, but still not much better than the current 8.2% unemployment rate.
The Fed also sees improvement in overall economic growth, predicting the economy will grow between 2.4% and 2.9% this year, which would be significantly better than 1.7% growth last year.
"The Committee expects economic growth to remain moderate over coming quarters and then to pick up gradually," the official statement said.
Sheila Bair: Is the Fed pushing us into another bubble?
Despite the improving outlook, Fed officials still believe the economy will remain weak enough to warrant ultra-low interest rates "at least through late 2014." The Fed has kept interest rates near zero since December 2008, hoping cheaper access to credit will spur economic growth.
Richmond Fed President Jeffrey Lacker dissented against that language, as he did in the last two meetings. He believes the economy will not need ultra-low interest rates as far out as late 2014. All nine of the Fed's other voting members voted in favor of the statement.
on the other hand. the program known as Operation Twist remains in place, shifting $400 billion from short-term to long-term bonds. The hope is that this program, which is scheduled to end in June, will bring down long-term interest rates on items like car loans and mortgagesRating: 4.5
Title : Federal Reserve believes economy improving
Description : Federal Reserve believes economy improving The Federal Reserve believes the economy is improving, but not enough to warrant a change in ...