Fed minutes reveal upbeat outlook for US economy
Minutes from the latest Federal Reserve meeting have revealed that policymakers are optimistic that the US downturn is coming to an end.
However, the minutes did say that the economy is “likely to recover only slowly during the second half of this year and all saw it as still vulnerable to adverse shocks.”
Furthermore, policymakers expressed their uncertainty as to how quickly the economy would grow in 2010 and warned that unemployment may affect consumer behaviour.
The statement comes after the Organisation for Economic Co-operation and Development (OECD) said the global recession is ending faster than originally thought and expects the US to exit recession in the third quarter.
The OECD is predicting that the world’s largest economy will grow at an annual rate of 1.6% in the third quarter.
Meanwhile, the Fed believes that “the downturn in economic activity was ending”, primarily due to a levelling out in consumer spending and stability within the housing market and manufacturing.
Last month the Fed elected to keep US interest rates on hold at a range of between 0% and 0.25% and at the time said that the current low levels of interest rates will likely continue “for an extended period” to aid the continuing recovery.
Since the meeting, US President Barack Obama confirmed that Ben Bernanke has been nominated for a second term as chairman of the Federal Reserve.
Mr Obama said “Mr Bernanke had helped prevent a repeat of the Great Depression.”
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