Jump to content

Fed Raises Economic Outlook, Leans Toward 2014 Hike


Recommended Posts



The Federal Reserve has boosted its outlook for U.S. economic growth this year and is slightly more optimistic about the unemployment rate, reflecting improvements in recent months.

In an updated forecast Wednesday, the Fed predicts the economy will grow between 2.4 percent and 2.9 percent in 2012. That compares with its forecast in January, when it estimated growth this year between 2.2 percent and 2.7 percent.

The Fed is estimating that unemployment, now at a three-year low of 8.2 percent, will be between 7.8 percent and 8 percent at year's end.

Its prediction for inflation is slightly higher but remains below its 2 percent target. And 11 Fed officials expect the first interest rate hike will not occur until 2014 or later, the same number who said so in January.

But the statement was a bit more hawkish in sentiment, with seven Open Market Committee members seeing a rate hike in 2014.

The forecast is critical in that it is indicative of whether the Fed will take on a third round of quantitative easing measures to boost the economy. An improving economy would suggest that QE3 is not imminent, though Chairman Ben Bernanke reiterated that the central bank is keeping its options open.



Now he's an optimist.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • 1709336973
  • Create New...