The US regulator has raised its forecast for GDP growth in 2021 to 7%. At the same time, the forecast for inflation has been increased to 3.4%.
The US Federal Reserve (Fed) kept its benchmark interest rate at 0-0.25%, as expected by the market. This is stated in the message of the financial regulator following the meeting of its management on Wednesday, June 16.
“The Committee decided to maintain the target range of the federal funds rate at 0-0. 25% and believes that it will be appropriate to maintain this range until labor market conditions reach levels consistent with maximum employment estimates and inflation growth reaches the target 2%,” the report said.
In addition to keeping rates at current levels, the Fed plans to continue buying at least $80 billion in Treasury bonds each month and at least $40 billion in mortgage-backed securities (MBS) each month in the coming months until significant progress is made on maximum employment and price stability.
The Fed also raised its forecast for GDP growth in 2021 to 7% from 6.5%. The economic growth forecast for 2022 was maintained at 3.3%. By the end of 2023, it is expected to grow by 2.4% against the previously predicted 2.2%.
The US regulator also improved its forecast for unemployment in 2022 to 3.8% from 3.9%. In 2021, the unemployment rate is expected to be around 4.5%, in 2023 – 3.5%.
The forecast for US inflation in 2021 was increased to 3.4% from 2.4%, in 2022-to 2.1% from 2%, in 2023-to 2.2% from 2.1%.
Earlier it was reported that under President Joe Biden, prices in the United States are growing faster than under former head of state Donald Trump. At the end of May, consumer prices in the country increased by 5% in annual terms.