News / Economy

Bernanke Offers Mixed Economic Outlook For US

Bernanke Offers Mixed Economic Outlook For USi
X
March 21, 2013 1:47 AM
The Federal Reserve has cut its economic outlook for 2013 but says the unemployment rate is likely to fall faster than previously expected. In a statement following a two-day meeting of central bank policy makers, Fed Chairman Ben Bernanke reassured financial markets, saying long-term interest rates would remain low for the foreseeable future. Mil Arcega reports.
Bernanke Offers Mixed Economic Outlook For US
The Federal Reserve has cut its economic outlook for 2013 but says the unemployment rate is likely to fall faster than previously expected.  In a statement following a two-day meeting of central bank policy makers, Fed Chairman Ben Bernanke reassured financial markets, saying long-term interest rates would remain low for the foreseeable future.

Despite a strong pickup in manufacturing and a much-improved housing market,  the outlook for the US economy remains mixed.  The Federal Reserve said U.S. growth is unlikely to exceed 2.8 percent in 2013.  

On the other hand, Fed Chairman Ben Bernanke expects U.S. unemployment will fall faster than expected - to as low as 7.3 percent by the end of this year.

"Private payrolls are growing more quickly, total hours have increased, the rate of filings and new claims for unemployment insurance has fallen, and the unemployment rate has continued to tick down," Bernanke said.

But persistent concerns about government spending cuts, tax hikes, and new signs of instability in Europe continue to weigh on the central bank.  As a result, the Fed plans to keep its $85 billion a month bond buying program to keep long-term interest rates near zero. The low rates have contributed to an extended winning streak on Wall Street.

"The stock market right now is really addicted to this Fed stimulus.  I mean if the Fed had given any indication that they were thinking of scaling back the stimulus, the stock market would have sold off very sharply, but instead the market is up," said Greg McBride at Bankrate.com

McBride says that's because low interest rates encourage spending and investments in riskier assets.  While low rates can help boost economic growth, they can also fuel inflation.

Barring a sharp increase in prices, the Fed expects to keep interest rates low until the jobless rate falls to 6.5 percent.

Most experts say that's not likely to happen until at least 2015.

You May Like

Sydney Hostage-taker Failed to Manipulate Social Media

Gunman forced captives to use personal Facebook, YouTube accounts to issue his demands; online community helped flag messages, urged others not to share them More

UN Seeks $8.4 Billion to Help War-Hit Syrians

Effort aimed at helping Syrians displaced within their own country and those who've fled to neighboring ones More

Who Are the Pakistani Taliban?

It's an umbrella group of militant organizations whose objective is enforcement of Sharia in Pakistan 'whether through peace or war' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Putin: Russian Economy to Rebound in 2 Yearsi
X
December 18, 2014 5:13 PM
Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Putin: Russian Economy to Rebound in 2 Years

Russian President Vladimir Putin held his annual end-of-the-year news conference Thursday, tackling questions on the Russian economy, the crisis in Ukraine and Russian relations with the west. VOA's Jeff Custer reports.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8140
JPY
USD
118.81
GBP
USD
0.6402
CAD
USD
1.1597
INR
USD
63.066

Rates may not be current.