Interest Rates Won't Be Rising Anytime Soon
Fed wraps up meeting, cuts growth forecast
By Newser Editors and Wire Services
Posted Jun 18, 2014 2:15 PM CDT
In this May 7, 2014 file photo, Federal Reserve Chair Janet Yellen testifies about the economy before the Joint Economic Committee of Congress on Capitol Hill.   (AP Photo/Charles Dharapak, File)

(Newser) – The Federal Reserve has sharply cut its forecast for US growth this year, reflecting a shrinking economy last quarter caused mostly by harsh weather. At the same time, the Fed has barely increased its estimate of inflation despite signs that consumer price increases are picking up. Its benign inflation outlook suggests that the Fed doesn't feel rising pressure to raise short-term interest rates. The Fed updated its economic forecasts today after a two-day policy meeting.

It expects growth to be just 2.1% to 2.3% this year, down from 2.8% to 3% in its last projections in March. It thinks inflation will be a slight 1.5% to 1.7% by year's end, near its earlier estimate. Fed members think short-term rates will remain low in the long run. That may reflect Chair Janet Yellen's view that rates will remain at historically low levels even after the unemployment rate falls back to its longer-term average because the economy may remain weak.

Copyright 2016 Newser, LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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Showing 3 of 15 comments
Chris Farley
Jun 19, 2014 6:10 AM CDT
the stock jumps after the fed meeting. If food, energy were figured into inflation (both are spiking), they would realize inflation at the consumer level is way up. The actions of the fed are to either rain in inflation or unemployment.
bruno937
Jun 18, 2014 11:09 PM CDT
Now the top three people at the reserve answer directly to Tel-Aviv and the rest indirectly. I am worried.
MisterPlinkett
Jun 18, 2014 10:15 PM CDT
File this under the no shit category. The Fed can't raise interest rates...their whole house of cards would come toppling down. It's going to anyway.