Photo: Karen Bleier Agence France-Presse
“The health crisis present will weigh heavily on economic activity, employment and inflation in the short term [ … ],” noted the Fed in a communiqué issued at the end of the two-day meeting on monetary.
The u.s. central Bank warned that it would leave its interest rates low for a good time, even if it anticipates a rebound in the largest economy as early as next year. In 2020, the national bank anticipates a decline in the GDP of the United States of 6.5 %, before a strong rebound of 5 % in 2021, and more modest growth (3.5 per cent) the following year. The world’s largest economy had dropped from 4.8% in the first quarter, after more than ten years of growth. The GDP could plunge to 20 or 30 % in the second quarter.
Unemployment, which had climbed to 14.7 % with the implementation of containment measures, but declined in may to the general surprise, the Fed is seen reaching 9.3% for the whole of 2020, and then decline to 6.5% in 2021 and 5.5 % in 2022. Before the pandemic, it had reached its lowest level in 50 years, to 3.5 %.
These forecasts are the first that are published by the Fed since the beginning of the pandemic that has brought the country into one of its worst crises. “The health crisis present will weigh heavily on economic activity, employment and inflation in the short term, and poses significant risks to the economic outlook in the medium term,” noted the Fed in a communiqué issued at the end of the two-day meeting on monetary.
The central Bank has kept its policy rates unchanged in the range of 0 to 0.25 %, the level at which it had lowered in march when the country has begun to implement containment measures to combat the pandemic, putting a screeching halt to economic activity. She promised, as it has done since the beginning of this crisis, to do everything she could to support the first economy in the world. The u.s. central Bank has put in place since the beginning of the crisis a range of measures, some unprecedented, to allow the economy to withstand.
The secretary of the Treasury, Steven Mnuchin, said Wednesday that it expects a strong rebound of the economy in the second half.