US Central Bank cuts growth forecast for 2014
The US Federal Reserve has cut its growth forecast for 2014 because
of the harsh winter weather.
The Central Bank is now predicting growth of between 2.1% and 2.3%
for this year, down from its March forecast of 2.8% to 3%.
However, in its accompanying statement, the bank said that economic
activity had "rebounded in recent months". As expected, it has also
trimmed back its stimulus program by $10 billion (£5.9 billion) a month
to $35 billion. The Central Bank has been buying bonds to keep long-term
interest rates low and encourage banks to lend. This is the fifth cut in
purchases since December and it is expected to stop buying bonds
altogether by the autumn. However, the chair of the bank, Janet Yellen,
stressed that this was not a pre-set program and if necessary it would
change course. As far as interest rates go, the bank said they would
remain near zero "for a considerable time" after the bond buying ends.
- BBC
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