The Federal Reserve signaled on Wednesday it expects the U.S. economic recovery from the coronavirus crisis to accelerate with unemployment falling faster than the central bank expected in June.
In new economic projections released along with the U.S. central bank’s latest policy statement, Fed policymakers at the median see economic growth dropping by 3.7 per cent this year, an improvement from the 6.5 per cent drop projected in June.
The Fed also expects that the unemployment rate, which has improved faster than officials foresaw in June, will continue to drop, with policymakers at the median expecting joblessness to hit 7.6% at the end of this year and fall to 4 per cent in 2023.
Inflation is expected to remain below 2 per cent until 2023. The Fed last month unveiled a new strategy that pledges to lift inflation above the 2 per cent level to make up for years of undershooting that target.