The US Federal Reserve less optimistic for 2015 – Les Echos

The meeting of the Fed’s monetary policy committee has not led to an increase in rates. It revised its macroeconomic projections for 2015 downward.

Still no increase in rates but some indications on the outlook for coming months. “Economic activity is moderately developed after stagnating in the first quarter. Job creation rose but the unemployment rate remained stable , “said the US Federal Reserve, to justify keeping rates at their current level.

His new macroeconomic projections for the rest of the year, less optimistic than in March, partly explain his caution. She has given the cold snap on the US economy earlier this year and expects that GDP will grow by only 1.8% to 2% year on year in the fourth quarter 2015 (against 2.3 to 2.7 % in its last forecast).

The unemployment rate meanwhile is expected to be between 5.2% and 5.3% (against 5 to 5.2% previously). “The committee wants to see tangible evidence of improvement before we judge appropriate to raise rates ” insisted Janet Yellen. Its projections for 2016 and 2017 are however unchanged.

Gradual increase very

The majority of economists now betting on a rate hike in September, the latter having been kept close to zero since the outbreak of the crisis in 2008. A rise this year is very likely, 15 of the 17 members of the Monetary Policy Committee is in favor of a move this year.

But it will undoubtedly be more modest than expected: the Monetary Policy Committee is changes in interest rates between 0.25% and 1% by the end of the year. More no member of the Committee expects rates above 1% this year, while they were still four in March.

“ We continue to expect the first increase in September says Satyam Panday, an economist at Standard & amp; Poor’s. The Fed remained cautious because she wants to prepare the markets for a very gradual increase, but his forecasts show that she sees the bad start early in the year as a cyclical point . ”

Any possible increase will be “gradual”

The estate of indicators published in recent months has indeed blown hot and cold, delaying a monetary policy decision that many expected in the summer. The bad start of the US economy – with GDP down 0.7% in first quarter – and the persistent low inflation (0.1% in April) have even led the IMF, there are ten days, to advocate an increase in 2016 than this year.

Since then, the good figures in May of job creation were somewhat reassured and many economists believe now the beginning of year slowdown was temporary. Very conservative, Janet Yellen has however careful not to give a timetable, is by tirelessly putting the economic indicators published by then.

“The committee took no decision on the appropriate timing, she repeated. This will depend on macroeconomic data coming months. “ Any possible increase will be” incremental “, and will not follow any” Mechanical scheme . ” And even after the first increase, monetary policy may remain “ very accommodative for a while.”

Elsa Conesa