US Fed provides economic assessment
Ben Bernanke, chairman of US central bank, the Federal Reserve, said he expects economic growth to be between 3.1% and 3.3% for the 2011 year – lower than a previous forecast of 3.4% to 3.9%.
Mr Bernanke said the reduced growth was the result of lower defence spending, slower exports and bad weather.
At a press conference, Mr Bernanke also suggested the bank would not be injecting any more funds in to the economy, via its quantitative easing, after June.
However, he said the end of the stimulus programme was “unlikely to have a significant effect on financial markets or the economy”.
Meanwhile, the central bank said unemployment will fall to a rate of between 8.4% and 8.7% from 8.8% to 9%.
However, the Chairman also expressed concern for the country’s debt levels, describing them as “the most important long-term economic problem facing the US” and dealing with the deficit should be the “top priority” for the Government.
Finally, the economy is faced with rising inflation – as are many other economies. US inflation rose to 2.7% last month but Mr Bernanke said he is confident that underlying inflation remained stable.