Federal Reserve revealed Wednesday that its policy makers had substantially upgraded their forecasts for how much the United States economy will grow this year, even though they expect that unemployment will remain painfully high for some time.
The core projections of top Fed officials now call for growth of 3.4 percent to 3.9 percent this year, up from the previous forecast of 3 percent to 3.6 percent, released in November.
Of course, that "painfully high" unemployment projection is what really counts. It really, really counts for a Democratic White House win next year. Minutes from the meeting, too, showed that there are still worries about Europe -- and that means potential trouble for the US. To balance that out, they see inflation staying under control.
The minutes noted that most Fed officials viewed the large slack in the economy — that is, the economy’s underperformance relative to its potential — as “likely to remain a force restraining inflation,” and believed that while price declines were unlikely, inflation was likely to remain below its desired level (2 percent or slightly below) “for some time.” ...NYT
