US Economy to Grow 6.5% This Year... "No Interest Rate Hikes Until 2023"

FOMC Meeting Results Announced... Inflation Rate Forecasted at 2.4%, Unemployment Rate at 4.5%
Despite Economic Recovery, FOMC Members Predict Interest Rates to Remain Steady Until 2023
Fed Chair Powell: "Monetary Policy Changes Require Real Changes, Not Predictions"

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. Federal Reserve (Fed) has projected the U.S. economic growth rate for this year at 6.5%. While expecting the pace of economic recovery in the U.S. to accelerate, with inflation reaching 2.4% this year, the Fed drew a line by stating that there will be no interest rate hikes until 2023.

On the 17th (local time), after concluding the two-day Federal Open Market Committee (FOMC) meeting, the Fed announced in a statement that it would keep the benchmark interest rate unchanged at the current 0.00?0.25% and maintain the asset purchase pace of $120 billion per month.

In a separate release, the Fed raised its economic growth forecast for this year from 4.2% in December last year to 6.5%. The growth forecast for next year was slightly increased to 3.3%. The unemployment rate is also expected to fall from the current 6.2% to 4.5%.

Due to economic growth and base effects, inflation is predicted to exceed the target of 2%, reaching 2.4%. Core inflation, which excludes the volatile energy and food sectors, is expected to be 2.2%. Core inflation is the most important indicator the Fed considers when deciding on the benchmark interest rate. The Fed expects inflation to be temporarily pronounced this year but to stabilize around 2%. It views the inflation rise as a temporary phenomenon.

Despite economic growth, the dot plot showing FOMC members’ interest rate projections indicated that the benchmark rate will remain at the current level until 2023. This confirms the Fed’s intention to maintain an accommodative monetary policy stance even if economic recovery and inflation accelerate faster than initially expected.

Fed Chair Jerome Powell emphasized at the press conference that "there must be a real change, not just forecasts, to change monetary policy." He presented achieving maximum employment and inflation moderately exceeding 2% as the criteria for raising the benchmark interest rate.

This content was produced with the assistance of AI translation services.