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Economy in Brief

FOMC Sees Pickup in Economic Growth and Job Creation; Pares Back Bond Purchases Further
by Tom Moeller  June 18, 2014

At today's meeting of the Federal Open Market Committee, the Fed indicated that the economy, consumer spending, business investment and job creation each had improved. Two caveats, however, regarding growth were offered: the housing market recovery remained slow and fiscal policy was restraining growth. Price inflation was seen as running below the Fed's 2% long-term objective.

Economic activity and labor market activity were expected to continue moderate improvement. Real GDP growth was expected to average 2.20% this year, then 3.10% in 2015 and 2.75% in 2016. PCE inflation was seen at 1.60% this year, then 1.75% and 1.80%. The unemployment rate was expected to average 5.30% by yearend 2016.

As a result of the economy's improvement, the Fed reduced the amount of its asset purchases of agency mortgage-backed and longer-term Treasury securities to $35 billion per month from $45 billion per month. The Federal funds rate was left unchanged in a range of 0.00% - 0.25% and the discount rate remained at 0.75%.

The press release for today's FOMC meeting can be found here.

Haver's SURVEYS database contains the economic projections from the Federal Reserve Board.

Current Last 2013 2012 2011 2010
Federal Funds Rate, % (Target) 0.00-0.25 0.00-0.25 0.11 0.14 0.10 0.17
Discount Rate, % 0.75 0.75 0.75 0.75 0.75 0.72
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