Economic activity in the U.S. is likely to maintain its current pace for the next two years, according to estimates from the Federal Reserve Board, so don't expect a major change in the central bank's interest rate policy any time soon.
At the regular meeting of the Federal Open Market Committee this week, the agency said it will keep its key interest rate below 0.5 percent until economic conditions show further improvement. When that will be is an open question.
The Fed noted that growth in Gross Domestic Product (GDP) is projected to be about 2 percent for the next three years, the unemployment rate will be below 5 percent, and the inflation rate is not likely to reach the Fed target of 2 percent until that time.
The central bank governors said the pace of improvement in the labor market has slowed even as overall economic activity "appears to have picked up." And although the unemployment rate has declined -- a good sign -- job gains have also diminished -- not a good sign.
Consequently, the economic monitors expect "only gradual increases" in interest rates as the economy "evolves."
Bottom line: Don't look for the stimulus program to ease up "for some time," as the Fed put it. Good bet: Wait 'til next year.
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