Fed Sharply Cuts Forecast for US Economic Growth
Source: AP
The Federal Reserve has sharply cut its forecast for U.S. growth this year, reflecting a shrinking economy last quarter caused mostly by harsh weather.
At the same time, the Fed has barely increased its estimate of inflation despite signs that consumer price increases are picking up. Its benign inflation outlook suggests that the Fed doesn't feel rising pressure to raise short-term interest rates.
The Fed updated its economic forecasts Wednesday after a two-day policy meeting.
It expects growth to be just 2.1 percent to 2.3 percent this year, down from 2.8 percent to 3 percent in its last projections in March. It thinks inflation will be a slight 1.5 percent to 1.7 percent by year's end, near its earlier estimate.
Still, more Fed members than in March expect the central bank's short-term rate to be 1 percent or higher by the end of 2015. That points to the prospect of more members advocating higher interest rates next year. Fed policymakers' average forecast for short-term rates in 2016 also edged up.
Read more: http://abcnews.go.com/Business/wireStory/fed-sharply-cuts-forecast-us-economic-growth-24195196
OKNancy
(41,832 posts)LOL - or neither!
http://www.democraticunderground.com/1014828805
Source: Bloomberg
By Jeff Kearns Jun 18, 2014 2:12 PM ET
The Federal Reserve said growth is bouncing back and the job market is improving as it continued to reduce the monthly pace of asset purchases.
Growth in economic activity has rebounded in recent months, the Federal Open Market Committee said today in a statement in Washington. Labor market indicators generally showed further improvement. Business spending resumed its advance.
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more discussion in Purveyor's thread
OneCrazyDiamond
(2,031 posts)OKNancy
(41,832 posts)Got the IRA in a Vanguard index fund. ( actually more than one fund)
They say the same thing.
Ed Suspicious
(8,879 posts)slowing bond buyback and the same day bring the pessimistic forecast. It seriously seems like a forecasters are idiots or there is some social control value in confusion and inconsistency in the economic landscape. What that value might be is beyond my understanding, but I feel like there is never any firm ground to stand on and it paralyzes me when it comes to economic decisions.
http://www.bidnessetc.com/22129-what-to-expect-when-the-fed-elaborates-on-its-monetary-policy-today/
Morgan Stanley (MS) is bearish on todays FOMC meeting. The firm expects the Federal Reserve to cut its GDP growth forecast for 2014, and believes it may also forecast a lower long-run band for the Fed Funds rate. It also expects an upward revision in forecasts for inflation and a downward revision in unemployment forecasts.
More inflation, less unemployment sits comfortably with Lower GDP growth? That seem odd. Would someone versed in economics explain this to me? I don't get it.
DeSwiss
(27,137 posts)MISHMASH77
(5 posts)Does this mean I won't have to down grade from
steak to chicken,
or chicken to cat food,
or cat food to dog food,
or dog food to bird seed?