Fed Sees Hopeful Signs

The United States Federal Reserve expects the US economy to improve in coming months, according to new reports from the central bank. After the Fed’s last meeting at the end of April, policymakers declined to take any new steps to help the economy. The Fed launched a US$1.2 trillion effort in March to purchase government debt and mortgage securities in an effort to shore up the US economy.

Documents from the April meetings said that “Participants noted some improvement in financial conditions in recent months, signs that consumer spending was leveling out and tentative indications that activity in the housing sector might be nearing its bottom.”

The Fed’s staff increased its forecast for economic growth for the second half of 2009, though the partial year figures have not been released. For the year to date, the US economy has struggled, and the overall yearly figures will be affected by the poor first half results. For the entire year, it is estimated the US economy will shrink from 1.3 to 2.0 percent, and unemployment may rise to as high as 9.6 percent.

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22/05/2009

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