The US Federal Reserve has cut its forecast for economic growth this year from between 2.1 percent and 2.3 from an earlier projection of around 2.9. percent
After a two-day policy meeting, the Fed Chair Janet Yellen was optimistic as she announced the revised figures and hinted at a slightly faster pace of interest rate hikes from next year.
“The committee decided to make another modest reduction in the pace of it’s purchases of longer term securities. The committee maintained its forward guidance regarding the federal funds rate target,” said Yellen.
As widely expected, the central bank pushed ahead with plans to wind down one of its main stimulus program, reducing its monthly asset purchases from $45 to $35 billion dollars.
The Fed provided no further details about its plans to exit other aspects of the extraordinary measures it has taken in response to the crisis.
Although growth now appears to be rebounding, there remain weak spots, particularly in the housing sector and Fed officials describe risks to the economy and labour markets as “nearly balanced”.