A gloomy outlook for the coming years has been forecast by the Federal Reserve as it downgraded its projections for the US economy Wednesday. The Fed warned that high unemployment and weak growth of the economy are here to stay for years.
The unemployment rate has been forecast by the Fed to be around 8.6 percent at the end of next year, slightly down from the current 9.1 percent. Even by late 2014, it is expected to be between 6.8 and 7.7 percent. Fed’s forecast in June had projected unemployment to be around 8 percent by the end of 2012.
The Fed’s policymaking board, during a two day meeting that ended Wednesday, did not initiate any action to boost the economy and left the interest rates at their current low levels. Central bank leaders have now reconciled to the idea that the economy is not likely to grow as before because of the consumer debt and a depressed housing market. As such, they feel that employment figures are not likely to improve given the expectations that economic growth will be stunted in 2012.
Fed Chairman Ben S. Bernanke said that “Evidently . . . the drags on the recovery were stronger than we thought,” and added that the problems in the housing market were more severe and stubborn than analysts had thought.
Read More : Fed Forecasts Weak Growth and High Unemployment in the Years Ahead
The unemployment rate has been forecast by the Fed to be around 8.6 percent at the end of next year, slightly down from the current 9.1 percent. Even by late 2014, it is expected to be between 6.8 and 7.7 percent. Fed’s forecast in June had projected unemployment to be around 8 percent by the end of 2012.
The Fed’s policymaking board, during a two day meeting that ended Wednesday, did not initiate any action to boost the economy and left the interest rates at their current low levels. Central bank leaders have now reconciled to the idea that the economy is not likely to grow as before because of the consumer debt and a depressed housing market. As such, they feel that employment figures are not likely to improve given the expectations that economic growth will be stunted in 2012.
Fed Chairman Ben S. Bernanke said that “Evidently . . . the drags on the recovery were stronger than we thought,” and added that the problems in the housing market were more severe and stubborn than analysts had thought.
Read More : Fed Forecasts Weak Growth and High Unemployment in the Years Ahead
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