New FED Forecast 2013-2016
"The 85 billion Per Month Program in US Bonds Purchases is not Postponed.."
The US Federal Reserve recently postponed the start of the wind-down of its massive monetary program that aims to support the US economy. FED shall wait for more solid economic evidence concerning the US economic growth before cutting its $85 billion per month program regarding US bond purchases.
The FED Chairman Ben Bernanke during June had said that the Fed expected to cut back its US bond purchase program before the year-end. Now instead he argues: “There is no fixed calendar schedule” and "If the US economy data confirm our basic outlook, then we could move later this year" Furthermore, Bernanke declined to comment on his own future.
Here is what the FED forecasts regarding the US economy during 2013-2016
ECONOMIC GROWTH FORECAST
The Fed cut its forecast for 2013 economic growth to a 2.0-2.3% range. The previous estimation was a range between 2.3% and 2.6%. The Fed's projection range for 2013 real GDP is 1.8% to 2.4%, down from 2.0% to 2.6% in June. For 2014, the Fed is forecasting GDP growth of a range between 2.2% to 3.3%, down from the previous forecast of 3.3% to 3.6% (June 2013).
US UNEMPLOYMENT RATE
The Fed forecasts that the US unemployment rate for 2013 will be in a range from 6.9% to 7.3%. The previous estimation in June was 6.9% to 7.5%. Note that the U.S. jobless rate in August 2013 was 7.3%.
During the upcoming years, US unemployment is expected to decline furthermore. For the year 2016, the Fed is forecasting an unemployment rate of 5.2% to 6%. The FED Chairman Ben Bernanke, said regarding the future US unemployment rate: “A jobless rate of 7.0 percent is not a magic number".