Fed Upgrades Economic-Growth Forecast

By
Photo: Kevork Djansezian/Getty Images

Minutes were released today from a meeting of top Fed officials in late January. They revealed that — surprise! — the country's output of goods and services is expected to grow by 3.4 percent this year, which is better improvement than they previously forecast back in November. But the minutes also showed that — surprise! (Now in the ironic way) — unemployment is still expected to remain dismal this year, hovering at around 9 percent. The good numbers were apparently a result of an improvement in consumer spending in the fourth quarter, which is heartening news but not necessarily something the Fed is counting on to continue. Meanwhile, at the January meeting, the Fed's Open Market Committee voted unanimously to purchase $600 million in Treasury securities — a controversial move that some worry could spark inflation, but which the Fed is pretty much unified behind. They're also no longer worried about deflation, the minutes showed.

Fed Forecasts Faster Growth as Economy Gathers Steam [NYT]