Fed forecasts modest US growth, high unemployment into 2015, a sign rates will remain low

WASHINGTON – The Federal Reserve sees unemployment remaining high into 2015, suggesting it will keep short-term interest rates near record lows at least until then.

In its latest economic forecasts, the Fed predicts the unemployment rate will stay above 6.5 per cent for about two more years. Policymakers also expect the economy to grow modestly this year and next despite economic gains so far in 2013.

The Fed’s updated forecasts are nearly identical to projections it made in December. The Fed has said it plans to keep its benchmark rate near zero as long as unemployment exceeds 6.5 per cent and the inflation outlook is tame.

Fed policymakers expect the economy to grow as little as 2.3 per cent this year — not enough to quickly drive down unemployment — and 2.9 per cent in 2014.

News from © The Associated Press, . All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.

Join the Conversation!

Want to share your thoughts, add context, or connect with others in your community?

Create a free account

The Associated Press

The Associated Press is an independent global news organization dedicated to factual reporting. Founded in 1846, AP today remains the most trusted source of fast, accurate, unbiased news in all formats and the essential provider of the technology and services vital to the news business. More than half the world’s population sees AP journalism every day.

Related Articles