The Federal Reserve on Wednesday cut its projection for US economic growth in 2014 and scaled back its annual growth estimate in the longer term to about 2 percent—far below the post-World War II average of 3.3 percent. It is an outlook that promises no relief for the vast majority of the population from six years of unemployment, falling wages, and cuts in education, health care and other vital social programs.
http://www.globalresearch.ca/economy-slumps-wall-street-booms/5387857
The Fed’s assessment amounted to an admission that slump and falling living standards for the masses of people are here to stay.
The bleak assessment was in line with two other economic reports released in recent days. Last week, the World Bank cut its projection for global growth this year to 2.8 percent from its earlier estimate of 3.2 percent, and downgraded its prediction for the US from 2.8 percent to 2.1 percent. On Monday, the International Monetary Fund revised downward its projection for US growth from 2.8 percent to 2.0 percent.
The IMF said unemployment in the US would not return to normal levels until the end of 2017 at the earliest.
Wall Street responded to the Fed’s assessment and policy statement Wednesday with a celebratory rally, pushing the Standard & Poor’s 500 stock index to a new record high and boosting the Dow by 98 points. The reason is not hard to fathom.
In keeping with the policy of central banks and governments around the world, the Fed made clear that it intends to continue pumping virtually free and unlimited credit into the financial system for at least another year. Fed Chair Janet Yellen went out of her way at a press conference following the close of the central bank’s two-day meeting to reassure the bankers and speculators that she would keep the benchmark federal funds interest rate at its present zero-0.25 percent level for months to come, and that extraordinarily low interest rates would continue indefinitely.
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