The US Federal Reserve (Fed) has lowered its forecast for economic growth this year. In June, the central bank had assumed an increase of seven percent, now it expects growth of 5.9 percent, as the forecasts published on Wednesday show. The rapid recovery of the American economy from the Corona crisis had recently slowed down somewhat due to the rapid spread of the delta variant. For 2022, the central bank now expects growth of 3.8 percent after the June forecast of 3.3 percent.
Most recently, the central bank's growth forecasts have mostly reflected the development of the pandemic.
Last December, before the vaccinations were used, the central bank had expected an increase of 4.2 percent for 2021.
In March it was already 6.5 percent, in June - thanks in part to the lower number of infections and the increasing vaccination rate - it was already 7 percent.
Since June, the number of infections and deaths has risen again because of the delta variant.
Fed: Current interest rate level is appropriate
In addition, the Fed is sticking to its very loose monetary policy. The key interest rate remains in the low range of 0.0 to 0.25 percent, as the central bank announced on Wednesday. The Fed will also continue to buy securities worth $ 120 billion per month. At the same time, the central bank signaled that purchases could soon be scaled back. The purchase of securities decided last year because of the corona crisis is intended to improve the liquidity of the financial markets and facilitate the provision of loans for households and companies.
At the end of July, with a view to the bond program, the Fed announced that the American economy had made progress on the goals of full employment and inflation.
This has now been confirmed.
And the Fed announced that a slowdown in the repurchase rate could “soon” be justified if the trend continues as expected.
The current interest rate level, meanwhile, is appropriate until there is full employment in the labor market and the inflation target of around two percent has been reached, the Fed emphasized after a meeting of the responsible money market committee.
The European Central Bank (ECB) recently announced a slight curtailment of its bond purchase program.Keywords: