US Federal Reserve expects lower inflation rates and stronger economic growth

US Federal Reserve expects lower inflation rates and stronger economic growth

According to a report by www.boerse.de, the US Federal Reserve (Fed) expects lower inflation rates this year and next than previously assumed. The inflation rate, measured by the PCE price index, is expected to average 2.8 percent in 2023, compared to a previously forecast annual rate of 3.3 percent in September.

This development could mean that the US Federal Reserve could adjust its monetary policy in the coming years in view of the lower inflation rate. Lower inflation could also have an impact on interest rates and financial markets as a whole. For example, lower inflation rates could mean that the Fed feels less pressure to raise interest rates to keep inflation in check. This, in turn, could keep borrowing costs low for consumers and businesses and stimulate investment and consumption activity.

Additionally, the report mentions that the Fed expects stronger economic growth, which could also impact financial markets. For example, higher economic growth could lead to higher corporate profits, which in turn could influence stock markets.

Overall, the Fed's forecast also shows that inflation in 2023 and 2024 will still be above the Fed's long-term target of two percent. It is therefore important to closely monitor developments in financial markets and the Fed's monetary policy decisions in the coming years.