Question

What does the FED expect to happen in the U.S. economy in the near future?

Answer 1

Last week Powell said the Fed’s work is to keep the US economy in a “Good Place” for “as long as possible”. The economic numbers for US have come weaker than the forecast. Federal reserve Chairman Jerome Powell said that the US economy is solid, and there is no need to do anything extra from the side of central bank. US manufacturing data has slimed to its weakest level in the decade and also the services sector have grew at the weakest pace since August 2016.

It is expected that the Labor Department will report weaker jobs growth that expectation for September.

FED’s views on US Economy are they believe their strategy and tools are effective. FED believes that the other economies are also facing longer term challenges. Other economies challenges are from low growth, low inflation, and low interest rates. FED are examining strategies which will help them to achieve the goal for inflation of 2%.

This year FED has already cut rates twice.

Outlook for US Economy:

The US Economy outlook is considered to be healthy based on the key economic indicators. The most important indicator is gross domestic product. Expectations are that the GDP growth rate will be in the range of 2% - 3% and unemployment rate will be maintaining its natural rate. There will not be too much inflation or deflation in the economy.