COR – The Fed is concerned about slowing growth
Most members of the Federal Reserve have lowered their growth forecasts at the last meeting of the Monetary Policy Committee of the Fed FOMC minutes showed 22 and June 23 on Wednesday.
They also felt they should be prepared to take further steps to support the economy if economic conditions continue to deteriorate.
"Drawing the consequences of changes in the financial context, most participants have slightly lowered their forecasts for growth," the minutes show.
"The Committee will consider whether to adopt more supportive measures if the weather deteriorates."
Meanwhile, the Fed will continue to evaluate the methods currently available to it to drain a huge volume of loans it has injected into the financial system, says the U.S. central bank.
The Fed officials have lowered their growth forecasts for 20,110 to a range between 3% and 3.5%, whereas it previously predicted a rise in gross domestic product from 3.2% to 3.7% in May last.
The Federal Reserve expects the unemployment rate between 9.2% and 9.5% in the fourth quarter, more or less what it provided in its previous estimates.
The reflections of the Fed have weighed on the Treasury bill yield to thirty years, investors anticipating a continuation of interest rates at current levels until at least the end of the year.
"This suggests that rates will stay low for long enough and, if necessary, the Fed will try to invent new ways to support the economy," said Ward McCarthy, chief economist at Jefferies & Co.
The general tone adopted by the Fed is tinged with caution, the Fed merely saying that the recovery is underway.
It reiterated its promise to keep interest rates at a level close to zero for an extended period.