Federal Reserve Confident That Economy is Improving
The U.S. Federal Reserve has announced that the job market is starting to show signs of improvement. In an announcement on Wednesday, the Fed pledges to hold rates at record lows to make sure that the economy can continue in an upward spiral.
In a majority decision with only one member voting “nay” during a meeting that lasted for two days, the Fed decided to honor its vow to hold down interest rates in order to add some oomph to a struggling economic environment.
While noting that there are still perils ahead for the economy, the Fed claimed confidence in the economy, citing that the job market was showing signs of improvement as well. This is an improvement from its mid-March meeting when the Fed said that unemployment was beginning to stabilize.
Also noted by the Fed following their two day meeting was that consumer spending had picked up; at its March meeting, the Fed had said that spending by consumers was expanding moderately.
The Fed still cited motives to be guarded, despite the economic gains. Tight credit, slow moving income gains, and a high rate of unemployment are still hampering consumer spending that is directly tied to economic activity. Bank lending has shrunk, and housing activity has only begun to edge up.
The statements by the Fed gave little reason for economists to move up their predictions on when the central bank should begin raising rates. A recent Associated Press survey of leading economists says that the earliest the Fed will do this is the fourth quarter.
