Fed Revises Down U.S. Growth Forecast

The Federal Reserve on July 20 marginally revised down its 2005 growth forecast for the U.S. economy to a range of 3.0% - 3.75%. The new figure, given in a mid-year report to Congress on monetary policy, compared with the forecast given in February for gross domestic product (GDP) growth this year of between 3.75% and 4.0%. For 2006, the U.S. central bank predicted growth of 3.25% to 3.75%.

"In general, Federal Reserve policymakers expect the economy to continue to expand at a moderate pace and core inflation to remain roughly stable over this period," the report said. The Fed said its preferred indicator of inflation, the price index for personal consumption expenditures (PCE) excluding food and energy, should stand at 1.5% to 2.25% this year. For next year, the PCE index is seen moving between 1.5% and 2.5%.

Copyright Agence France-Presse, 2005