The Fed lowered forecast of US economic growth

The Fed lowered forecast of US economic growth on Wednesday. The Fed believed that GDP could be flat or grow by just 0.3% this year and could shrink to 1.1% next year. The Projections are lower than the delivered forecast on July.

This Projection is sharply lowered because of slowing economic activity. The Economic forecast even loses traction and jolt into reverse. The Fed also predicted that unemployment number will jump higher. The Economic downturn will be significantly. Accordingly, some the fed officials suggested additional easing policy could be well appropriate at the future. Many economists expected that another rate cut could be forthcoming in the next FOMC that was scheduled on December 16 although some the fed official worried about effectiveness of the previous rate cut to stimulate the current financial market confidence.

The Fed opened direct loans to the fed for all banks on October as liquidity crisis choked all financial sectors and began to spread to industries sector.

Related Posts :

10/29/2008 Market Recap - The Fed interest rate cut
Fed Raises Interest Rate Paid For Excess Bank Reserves

Sources :

StarTribune: Fed sharply lowers economic forecasts for this year, 2009; signals another rate cut coming, November 19, 2008 01:53 PM

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