The Federal Reserve is bullish on the nation’s economic prospects.
With the expansion of vaccinations nationwide and the $1.9 trillion stimulus bill officially in play, The Fed issued its quarterly projections indicating the economy will grow by 6.5% this year — the largest annual growth output in nearly 40 years — and also forecast unemployment rates dropping to 4.5%. Both estimates are a big uptick from projections in December, when it predicted 4.2% growth and 5% unemployment.
Inflation is also expected to rise by the end of the year, to 2.4%. However, officials reaffirmed they have no plans to raise the target interest from its current number, near zero. Wall Street certainly liked that, as stocks finished higher after the news.
All signs are pointing to a major economic recovery playing out the rest of 2021, but Federal Reserve chairman Jerome Powell warned in a press conference today that the state of the economy beyond 2021 is not set in stone yet.
“The state of the economy in two or three years is highly uncertain…I wouldn’t want to focus too much on the exact timing of a potential rate increase that far into the future.”
