The Federal Reserve upped its real gross domestic product for 2021 from 4.0% to 4.2%. The central bank now expects GDP to fall just 2.4% in 2020, better than a decline of 3.7% predicted in September.
- Fed predicts the unemployment rate to fall to 6.7%, an improvement from 7.6% projected in September.
- In 2021, the unemployment rate will fall to 5.0%, better than the estimated 5.5%
- Fed will continue to buy at least $120 billion of bonds each month “until substantial progress” has been made on maximum employment and price stability goals.
- The Fed kept its inflation estimate for 2020 unchanged at 1.2% and sees the Personal Consumption Expenditures (PCE) inflation running to 1.8% next year, above the previous estimate of 1.7%
- Core PCE inflation is expected to be 1.4% this year, almost unchanged from September’s projection.
- Core PCE inflation is estimated to reach 1.8%, up from September’s forecast of 1.7%.
- The Fed kept interest rates unchanged after slashing them to near-zero in March following the fast-spreading coronavirus.
U.S stocks are currently gaining as the dollar loses. SPY is up 0.40%, QQQ is up 0.51%, EURUSD is up 0.38%