On June 16, local time, the Federal Reserve issued an economic forecast and policy statement. It is expected that by the end of 2023, interest rates will be raised twice, and interest rates will rise from 0.1% to 0.6%. At the same time, the Fed adjusted its inflation rate forecast for the fourth quarter of 2021 to 3.4%, and the overall inflation indicator in 2022 is expected to fall back to 2.1% and to 2.2% in 2023.
The statement said that with the recovery of the labor market and rising inflation, Fed officials expect economic growth in 2021 to be stronger than previously expected. Policy makers expressed confidence in achieving full employment and stable price targets in the next few years.
Federal Reserve Chairman Jerome H. Powell stated at a press conference that the decision to keep interest rates unchanged and continue to buy government-backed bonds will ensure that monetary policy continues to provide strong support to the economy until the end of the economic recovery .
Powell acknowledged the current price surge, saying that the indicators of long-term inflation expectations have generally reversed the decline of related indicators in the early stages of the epidemic, and are now at a level consistent with the Fed’s goals. Powell pointed out that if inflation exceeds the target set by the Fed, the Fed will be prepared to respond by reducing monetary policy support. (CCTV reporter Liu Xiaoqian)
