Yesterday the Federal Reserve slashed its predictions for economic recovery, they are now projecting it could be several years before conditions improve. More than half of the central banks are warning that it could take up to six years for unemployment, and inflation to return to normal levels. Like everyone else in America, I’m left wondering if we can all stand a few more lean years.
The much weaker forecast is the major reason that policymakers decided earlier this month to announce a plan to try and jumpstart growth by pumping an additional $600 billion into the economy through the purchase of long-term bonds. That plan, known as quantitative easing, has been criticized by several economists, politicians and foreign central bank officials.
The Fed now expects the economy to grow between 2.4% to 2.5% this year, compared to an earlier forecast of growth between 3.0% and 3.5%.
The Commerce Department reported Tuesday that the economy grew at a 2.5% rate in the third quarter, up from 1.7% in the second quarter but well below the increase of 3.7% in the first three months of the year.