Fed holds course on lowered US growth forecast
Published on Jun 19, 2014 6:29 AM
WASHINGTON (AFP) - The Federal Reserve slashed its 2014 growth forecast for the US economy after the rough winter but kept policy on hold on Wednesday, showing faith in a modest rebound.
Fed Chair Janet Yellen said the economy had picked up after the first quarter’s contraction, but she also downplayed a pickup of inflation as any sign of a need to tighten monetary policy.
As expected the Federal Open Market Committee cuts its stimulus program back by another US$10 billion (S$12.5 billion), to US$35 billion a month, compared with US$85 billion in December before the taper began.
It also left the benchmark federal funds interest rate at 0-0.25 percent, where it has been since the end of 2008, arguing that the economy still needs such extraordinary accommodation into next year, when the rate is expected to rise.
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