US Fed Stays Confident About Economic Growth, Despite Low Inflation

Forex News

The minutes of the Fed meeting, that took place on December 12-13, were more stringent than expected, indicating that the central bank is still willing to raise interest rates several times this year. The FOMC protocols also showed that politicians are optimistic about economic growth, and this was in part the result of government fiscal stimulus.

Fed leaders recognized the improvement of the US labor market and expansion of economic activity, despite the fact that they confirmed fears about steadily low inflation. Many representatives of the US Federal Reserve expected that tightening the labor market would lead to an increase in inflation in the medium term, but some continue to judge that core inflation will constantly remain below the target of 2%.

An important part of optimism about economic prospects was due to the tax reform plan. Some politicians noted that the expectations of the tax reform may have already increased consumer spending.