U.S. economy's rebound sets up test of Fed's new pledge
Friday, 10 23 2020, Category: Economy, Country: United States
The stronger-than-expected U.S. economic rebound from coronavirus lows could set up an early test for the Federal Reserve’s new pledge to keep interest rates near zero and its increased tolerance for inflation.
A compilation of surveys and interviews conducted in September and early October by the Fed’s 12 regional banks shows the economy recovering at a “slight to modest pace” as consumers bought homes and increased spending.
Indeed the U.S. economy probably grew by more than 30% on an annualized basis last quarter, economists say, making up most of the 31.4% drop in the second quarter.
The increase has been fueled by a $2.3 trillion pandemic relief package and trillions more injected into financial markets by the Fed.