One big question for Fed watchers is when the central bank will raise its short-term interest rate
The US Federal Reserve has cut its growth forecast for 2014 due to the harsh winter weather.
The central bank is now predicting growth of between 2.1% and 2.3% for this year, down from its March forecast of 2.8% to 3%.
However in its accompanying statement, the bank said that economic activity had “rebounded in recent months”.
As expected, it has also trimmed back its stimulus programme by $10bn a month to $35bn.
The central bank has been buying bonds to keep long-term interest rates low and encourage banks to lend.
This is the fifth cut in purchases since December and it is expected to stop buying bonds altogether by the autumn.
However chairman Janet Yellen stressed that this was not a pre-set programme and if necessary it would change course.
The Federal Reserve expects growth to pick up again in 2015, sticking to a prediction of 3% to 3.2% expansion.
“Economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually,” the central bank said.
“Household spending appears to be rising moderately and business fixed investment resumed its advance.”
Source BBC
